As of 10/23/2020
  Indus: 28,336 -28.09 -0.1%  
  Trans: 11,880 +131.58 +1.1%  
  Utils: 894 +2.40 +0.3%  
  Nasdaq: 11,548 +42.27 +0.4%  
  S&P 500: 3,465 +11.90 +0.3%  
YTD
-0.7%  
 +9.0%  
 +1.7%  
 +28.7%  
 +7.3%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 9/25/20
As of 10/23/2020
  Indus: 28,336 -28.09 -0.1%  
  Trans: 11,880 +131.58 +1.1%  
  Utils: 894 +2.40 +0.3%  
  Nasdaq: 11,548 +42.27 +0.4%  
  S&P 500: 3,465 +11.90 +0.3%  
YTD
-0.7%  
 +9.0%  
 +1.7%  
 +28.7%  
 +7.3%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 9/25/20

Bulkowski's HHGP Trade

 

Hudson Highland Trade: How to Make 55%

The chart of the Hudson Highland Group (HHGP) on the daily scale

I show the chart of Hudson Highland Group (HHGP) on the daily scale. This is a trade I made, actually, six trades by my count (two occurred on the same day and one was a partial fill that I completed with a market order). I show the buy as a B on the chart and the sale as an S.

Here is a portion of my notebook entry for the first trade with my explanation in brackets.

Today's date: 02/15/2008
Order details: Buy at limit 7.06 (and filled at 7.06). That's the 38% Fibonacci retrace of move from the 2/7/08 low. Day order. [The right shoulder of the head-and-shoulders bottom is February 7. The low on that day was 6.15 and the high on 2/14 (the day before I bought) was 7.72. A 38% Fibonacci retrace of this climb is: 7.72 - ((7.72 - 6.15) x 38%) = 7.12. I am scratching my head wondering why it does not equal the 7.06 entry price. No matter...].
Date bought: 2/15/08
Stop: 6.05 -16.6%. Stop used: 6.05, below the minor low on 2/7/08. [The stop was a volatility based stop and it was huge: 14.3% away (which differs from the notebook entry because my computer uses the current close and not the actual entry price, since I fill out the notebook before I buy). With low priced stocks, they are volatile and you have to give them room to breathe or you'll be stopped out.]
Upside target: 9.11 according to scoring system (-1 score). [The scoring system said that the chance of reaching the median rise of 29.04% for a head-and-shoulders bottom was not good (-1 score). The average rise of head-and-shoulders bottoms with scores less than 0 is 24%. Those above 0 climb an average of 48%. See my book, Trading Classic Chart PatternsTrading Classic Chart Patterns book., pictured on the right, for more details.]
SAR: 8 then 12-13. [SAR is support and resistance].
Next earnings: about 3 months.
Weekly scale (industry, too): 8 stocks have hit bottom and begun to turn, 4 have not. They are continuing down. Weinstein stages show nearly all are in stage 4. One is in stage 1, and one in stage 2. On the monthly scale, it shows that several stocks are resting on long term trendlines. [Weinstein stages refer to the book, Stan Weinstein's secrets for profiting in bull and bear markets where he splits the price chart into four stages. Stage 4 means the stock is dropping. 1 means the stock has pulled out of the dive; 2 means it is time to buy because the stock is moving up, and stage 3 means the stock has peaked and is now moving sideways, ready to drop in stage 4].
Indicators: Nothing exciting. Price is near top of the Bollinger band.
Buy reason: head-and-shoulders bottom in a nice solid block of congestion with an upward breakout. But market is weak, probably causing a throwback. I think the industry has bottomed and even though the market is continuing down, I think this could hold its own. If I'm wrong, it's just 1/4 position.

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Hudson Highland Trade: More Notebook

The following are more notebook entries. They describe how I raised my stop as price climbed. If you want to learn how to trail your stop, print out the Hudson Highland Group chart and the following entries, and then analyze both.

2/27/08 I like the insider buying: a ton of it in the last month.
2/28/08 Stop raised to 6.60
2/29/08 I bought more shares, one was a partial fill that I completed with a market order. This has returned to congestion area so I viewed it as a buy.
3/24/08 Stop raised to 7.19.
3/26/08 Stop raised to 7.79.
4/1/08 Placed order to buy more, limit order, at $8.40. I lowered the stop from 7.79 to 6.73 because I felt the stop was too close and I want this trade to be a long term holding. The new stop is below a support line at 6.80.
4/8/08 I feel this stock will complete the rounding turn by pushing higher. So I'm going to day order more shares at 8.93. That is a 50% retrace of today's price action. After the buy, then raise the stop to just below the consolidation region. Filled today: 4/8/2008.
4/9/08 I had TWO buy orders on the stock and they both hit, one when price climbed and the second when it fell. Oops. I didn't realize I had the other outstanding.
4/19/08 Stop raised to 7.52.
4/29/08 Buy stop for more shares at 9.57. This is just above a congestion zone and the mirror looks like it should complete a rounding turn and head up. A buy will confirm that move and it's one I want to be a part of.
5/1/08 My buy stop hit and filled at 9.57667. Stop raised to 7.93.
5/7/08 Stop raised to 8.55, volatility stop setting.
5/11/08? Stop raised to 9.21, below volatility stop of 9.37 and below 9.25 round number.
5/12/08 Stop raised to 10.13, inside the volatility stop but below the Fibonacci retrace of the move up from 5/5/08 and about midway down the tall candle on 5/6. It's a risk but this should run now.
5/19/08 Stop raised to 10.43, just below the minor low. I am worried about a reversal.
5/20/08 Stop raised to 10.67, volatility setting.
5/21/08 Stop raised to 11.03, closing the stop to limit the give back.

Hudson Highland: The Sale

Here is the notebook entry for the sale.

Date placed: 5/21/08
Date sold: 05/22/2008
Sell reason: My stop hit, just as I expected even though price closed higher. I tightened the stop because of the big 5+% decline yesterday for unexplained reasons (the market was also down big). Looks like I sold at the low for the day. I wanted to protect my profits.

As you can see in the chart, price continued higher for a few weeks, so I lost out on some money. Then price dropped and it closed today at 11.52. I made from 55.5% on the first trade to 14.6% on the last one.

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The Hudson Highland Group stock on the daily scale

Hudson Highland: Aftermath

Shown is what happened to the stock after I sold.

Price continued to swim against a falling market for about two more weeks before being dragged down with the market current.

In the figure, the sold line does not point to the price at which the transaction occurred, rather to the day when it occurred.

In the 2008 bear market that followed, the stock bottomed out in March 2009 below $1. The June peak was the high for the stock, so selling was the right decision.

-- Thomas Bulkowski

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See Also

 

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My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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