I have these 5 companies. Their shares have collapsed and I want to trade on them, but I don’t know on which of them to trade.
Please, give me some advices.
Will be grateful
Thanks in advance
Well when you say they’ve collapsed: I assume you’re meaning today as in “as of right now”.
I just looked at Chesapeake Energy. It’s about to make a double bottom so I know I’d trade it (long) with a particular system of mine. Moreover: that double bottom is right at the bottom of its entire range going back to February 2016 (I cannot go back further than October 2010 on my charts).
But I would say to find out WHY the stock has been trending down since June 2014. Must be a reason for that.
The other three I’d not look at personally. Prices are too low and too cheap. Meaning there may be liquidity problems. Also means probably not a lot of interest (if at all) by the professionals and institutional traders therefore not a lot of strength behind any movements in them. Then again: relative to the FANG and FAANG stocks Chesapeake also very cheap. (I usually only look at the big cap. stocks).
Thanks for detailed observation and comments. Would you recommend to buy Chesapeak shares for a long term?
Hello.
I’m not a long term trader so I cannot answer that question. But I just did take a look on the Internet. Seems as though they had some debt problems and a whole other bunch of stuff.
But I have them on a Watchlist now (thanks for pointing them out). So I’ll take a trade on them using that double bottom (matter of fact should place orders shortly).
You COULD try and trade them long term and with a trend following system. But I’m afraid I’d not be of much help to you there.
But I’m more than happy to detail what I’m doing with them if you like.
Well I’ve placed my limit buy order at 170.7 which is the previous low that is part of the double bottom about to be formed. Let’s see. Will posts charts later.
Interesting though: with this stock I cannot even use my normal method of using stops for the system that I would use to trade this thing. It would have me place a stop BEYOND zero. So I’m using an alternate method. Could be a long haul trade this though for it to get to my first TP. Good thing is it’s a long trade so interest is less and dividends are receivable.
Well. Here’s the chart and the trade. Blue line is my limit buy order.
Chesapeake Energy Corp, 13/06/2019 15:25:20
My limit order has not been executed as yet. Matter of fact the stock has gone up a little (after gapping up at the open).
But just to put my previous comments into perspective: you do need to know that a stock like this doesn’t move much. It may look like it on a chart. But that’s a bit deceiving. Price has not moved my side for at least an hour or two (well hardly anyway). This is but one of the reasons why professional traders and institutions wouldn’t even bother with a stock like this. Point is: if you want to make money on something like this it’s not going to be quick.
Be careful with this simple approach “buying the dip” because you can easily get second bottom as a gift. You know what I mean, the reason for buying the dip should be very sound, like clear reasons why the crowd is irrational selling too much, or you have some info about that company which potentially mean a rise in profits & profitable investment projects.
You can create portfolio using IB broker or also check CFD contracts on Hotforex and Tickmill they probably offer CFD on stocks of these companies, though I’m not sure.
Nice post (other than the reference to HotForex).
Well for the sake of interest here is the way I trade these (link below). Take a look at “The Memory Of Price” staring on page 56 of the e-book. It’s clearly explained and defined. And it has failed exactly once on me for the last few years. But then again: very few trades with it so that statistic may be meaningless.
But basically (and this is what I was saying about the final stop being BELOW ZERO for this particular stock): if you work out the distance from the most recent high to the previous low then that distance would have you place your final stop BELOW ZERO which is pretty interesting (never had that before).
I agree i.e. find out why this thing has been trending down the way it has. But let me say this (and this is the sheer beauty of Equities and Commodities): any trader and his dog that is looking at this stock will see the double bottom and trade it. Or will at least try. And all thing being equal this should at least cause a bump in the price. Whether or not this company is on its knees will obviously dictate as to whether or not the said trade hits its profit targets i.e. that’s another matter and one which remains to be seen of course. But: risk is limited (in my case to 5% in total) so nothing really to be concerned about I don’t think. Perfect scenario of course: there is a turnaround in both sentiment toward this stock and improvements with the company and price turns and starts trending upward in which case what started out at a relatively short term trade could end up being a trend follower (possibly even pyramiding into profitable trades on the way up).
My limit order still pending by the way.
https://drive.google.com/open?id=1Hqa8rfy0UcDYm1aF2E1xw4b447z9rfE2
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Thanks for that - will take a look at that book at some point 
A quick Search shows chk to be in just about the least “Trendy” place products wise, Narural Gas, Oil and “Fracking”. Apparently they aquired another Oil Company in February, laid off 400 last year and there are some pretty damaging insinuations about their CEO on “Wiki” - but whether that is “spin” because they are “unGreen” or true is a matter for personal speculation.
At the moment, it seem Pres Trump is rightly scepticall about the “Global Warming” hype, and particular the “Benefit - cost” position of any measures the US could put in place sensibly at the moment. But I seem to remember many of the States are ignoring his policies, and who knows what damage his successor will do to the US economy and the Hydrocarbons Sector in knee jerk reactions to irrational pressures ?
Imo to “Buy” this share as an “investment” is in some ways akin to “Shorting CO2 = Global warming” - which I believe personally will eventually prove to be the correct position - BUT whether the likes of chk will have been driven to extinction before that can be shown I don’t know !
If you want to “Trade it” - and I see no real short term objection to that, apart from the underlying issues I have stated - then @dpaterso advice and logic seems to be absolutely fine ! Listen to the man !
It will be a longer term trade - but hey - that can be fine and could offer opportunities to “scale in” as and if it goes up.
Do let us know what you decide.
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Hey thanks.
Very very nice post. I’m not too good at interpreting stuff like that I’ll tell you. Hence my only ever always trading systems based. So I’m always keen to read this type of analysis and input. Thanks again.
Well there is one BAD case scenario of course. This stock could trade lower and just stay there for eons. So you could very well end up carrying a loss forever and a day i.e. stop loss still intact but no profits to speak of. And of course holding onto that would cost you money on a daily basis. Not to mention hogging margin for that time which could be better utilized somewhere else although fortunately it’s a cheap stock so margin cost based on the position size that I can take in relation to my 5% risk on the trade is negligible really (even with ESMA restrictions in place).
So. My pending limit buy stays!!! LOL!!!
P.S.
Just had a thought. At my other broker it is possible to trade totally swap free. Caveat: no leverage. Ideal for a L-O-N-G term trades or investment. (Sadly in my case the account is not funded and cannot be at this time).
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That is so true - It seems the shares were at $30 2012 and 2014 - Big slide in 2015 and now at $1.77 (that little “bounce” you noted was to do with those tanker fires apparently)
I know before I started this game I used to buy “distressed shares” and wait for the recovery - worked on a couple - then I hit a firm called “Marconi” - Bought £5,000 at £0.20 and another £5,000 at £0.06 ) _ never did get any of that money back ! - So I thought "If I’m going to play this game - I need to do some learnng ! "
SO then I went to “Indices” as they can’t go bust - and now I’m trying to get the hang of “Forex” on the basis that it has pretty defined limits it is unlikely to stray beyond, both at the top and at the bottom.
It’s still bloody hard tho’
Of course “Risk” is dependent on other factrs too - like what other investments and “Cash” you have and I never really felt the loss of the £10,000 as “Other things” on the positive side dwarfed it - but to anyone “picking bottoms” on shares - just make sure you can afford to lose the lot - if the worst comes to the worst.
As I said though - I cannot fault your “buy limit” trade - a double bottom - coinciding with a previous “All time low” - is a great place to enter on a Buy - if you (like me) tend towards being a Contrarian at heart !
I have to say "I’m tempted too " !
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Hello again.
And thanks again for coming by. Much appreciated. (I do read your stuff in “The Lobby” by the way) (I just stay away because I don’t feel I’m qualified to comment and, well, certain things in life I’ve learned to stay away from and to not pass comment!!! Even if I agree!!! LOL!!!).
Moving FROM Indices to FOREX??? I’ll spare you my usual rant and rave!!! LOL!!!
And yes. One of the famous traders (you know: all those books you tend to buy when you cannot get it right) said something along the lines of “I’ve never seen a stock go to the moon but I have seen a stock go to zero”!!! LOL!!! Something like that anyway.
There’s another one I’m looking at. In your neck of the woods actually. Also because a forum member brought it to my attention. Called “Fevertree”. I never see these things because I’m only ever monitoring and trading the FAANG stocks and Microsoft. But here’s a link for fun anyway (about to update the thread with a chart now that my platform is back online today):
But if I get out of the proverbial mess that I’m (long story) I will seriously consider paying (again) for some decent software and stock screener (I used to use TC2000 by Worden Brothers at some point in my career but there’s probably better out there).
Just an update to this.
I’ve moved my limit buy to 184.4 with soft stop at 124.6. Reason being that last time around my entry was JUST missed unfortunately. But I’m figuring that as my cored trading system is expecting (or waiting) for pullbacks in the major Indices I could very well get another shot at this trade. Also didn’t realize that when I first looked at the chart: the previous low was as a result of gap down at the open that day i.e. price did not actually trade to that point so placing my original limit buy below the low of that particular bar was dumb and an oversight on my part.
Again: sorry folks. Have cancelled my order on Chesapeake. This could end up being a long term trade and I could even end up sitting on losses for a while. All that’s then doing is tying up margin which could be far better utilized on the more liquid stocks and with more volatility such as those that I trade as a rule (FAANG etc. etc. etc.). Seems like a great idea and probably is a great idea and trade. But with ESMA margin restrictions in place it’s just not worth it to me.