Short JBHT?

A

AnalyzeButFeel

I did. Let me start off by saying that I've only been trading since late January of this year, and that this is my first post in this forum. After many mishaps I've developed a strategy that I think that will work for me if I can control my emotions, which is the biggest problem I've had so far. The other is timing my trades. Anyway, now that I've told what you could probably guess about any novice trader, I'll tell you a bit more about the style of trading that I'm trying to get working.

I tried scalping fast moving stocks like GOOG and AAPL, and although I had one very good day at it, the rest of my experience with scalping was a disaster. So I've decided to stick with slower moving stocks like JBHT for intraday and 2-5 day trades. For analysis I basically look at classic chart patterns like triangles, support and resistance levels, and use some Fibonacci retracement lines. I also try to go with the trend, and take a look at the same stocks every day to get a feel for the way they move.

I've been following JBHT for a while, and it appears to me to be in a down trend off its most recent high of 25.84 on 5/10. From looking at the support and resistance lines on the 5 and 15 minute charts for the past couple weeks, I thought it would be a good idea to short it today (5/19) at 24.80. It closed at 24.48 on 5/18 and it looked like it was making a minor rebound before continuing its downward slide. I lost confidence in the stock's ability to get back up to 24.80 and ended up shorting it at 24.60. Of course, it then proceeded to hit 24.85 before it turned back down. I'm aiming for at least a profit at 23.80, a low that the stock hit on 5/17. My stop, based on resistance levels, is at 24.95. This gives me a reward-to-risk ratio of 80:35, a little better than 2:1.

Criticisms welcome.
 
Analyze this..............(1) The risk/reward is ~2 only if there's a 50% chance of either outcome occuring. Don't be deceived by a "high" number. (2) Your profit goal is a well-defined price based upon a prior daily low in the market. That's good. (3) Your buy-stop is based upon an "arbitrary level". That's not good. (4) From a technical and Market Profile prospective, the stock appears to be going higher based on what it's done since Wednesday morning; i.e. it's making higher lows and higher highs. (5) I'd lower the buy-stop to 24.85 (Friday's high) and raise the buy-limit to 24.20 (an intra-day low from Friday). (6) Either way, you should be out of this trade before lunch-time on Monday. We'll see what happens. Keep on truckin!
 
JBHT @ 24.39

- I don't follow this stock

- earnings 7/14

- implied volatiltiy 33.17%, 3 month range 28 ... 35, 1 year range 28 ... 48

- 1 year weekly: the (blue) uptrend channel arrived to a halt at 25.85 on 5/10, the upward traverse (red) failed at resistance
http://img119.imageshack.us/img119/5561/jbht605211yw1ui.gif

- 3 month daily: the (green) downtrend channel arrived to a halt at 23.8 on 5/17, resistance, also at upward (red) channel right trend line
http://img487.imageshack.us/img487/7590/jbht605213md1xu.gif

- 5 day 30 minute: best long entry 5/17 ~2 pm (see stoch and macd); volume trend kept changing back and force 5/16,17,18 eventually uptrend winning; 5/19 both indicators and volume trend settled for uptrend: higher probability entry
http://img487.imageshack.us/img487/6600/jbht605215d30m8iw.gif

- profit target bellow ~25.85 (intermediate uptrend seems over)

- stop loss ~0.7 bellow upward (red) channel right trend line: ~23.5 for Monday

- if not yet long, could look Monday for an entry (indicators and volume) for a reward / risk ~ 1:1 (after probable entry)

- I wouldn't take this trade at this point, because the uptrend seems almost over, and the probable reward / risk is small. I'd wait for a short entry when the up (red) channel halts, about 25.8

Let's see how this unfolds ...
 
From a fundamental point of view....

I will be the first to just come out and just say it....When looking to short a stock, I would choose a stock that is not in a industry that is showing very strong resistance to any downturn in the overall market. Maybe one that didn't just recently blow away the numbers along with all it's competitors mostly due to the demand side and passing along higher surcharges that will be here to stay even if oil falls...So the truckers are being used as an oil hedge as another factor in your decision...The trucking industry is also part of the the strongest MACRO sector in our economy...(TRANSPORTS)....but has not experienced the same momentum in price appreciation that the Rails and Airliners experienced over the last six months until recently...(OTHER TRUCKERS INCLUDE...listed in order by current strength...).....(UACL, ODFL, USOO, QLTY, CNW, SWFT, PATR, XPRSA, ABFS, CLDN, PTSI, YRCW, WERN, HTLD, JBHT, FWRD, FFEX, LSTR, SMXC, KNX, MRTN, TRBR, CENF, CVTI, SCST)

I could go to all the numbers, but this is enough....First you had the right idea to short...I think you could of shorted almost anything and made money.....The market was screaming short anything....But In my opinion you missed out on great gains, because you had your sector wrong.....When the market wants to fall apart you have to short the worst stocks in the best performing sectors....Some Miners, Steel, Metal Fabrication, Copper, Titanium, Oil, Rail, Brokers, Machinery, Coal, Foreign Banks or heavy Construction.....All of which had been taken way past valuation by the momentum boys....

6 month chart comparing 8 truckers
 

Attachments

I got out Monday morning. I covered half of my shares at 24.15, watched the stock sink to 23.89 (where I should've covered the other half) and then rise to 24.47, where I ended up covering the other half. I probably wouldn't stuck it out some more but I had to leave the house and didn't want to just let this one sit without watching it. One thing that weighed on my mind was the possibility of a general recovery bounce in the markets like we had today at the beginning of trading. JBHT gapped up around .50 but it was almost straight dowhill after that, it closed about .49 under.

One reason for my wanting to short JBHT was that it appeared to me from looking at the daily charts for the past 6 months and the past year the ~ 25.90 level that JBHT hit on 2/16 and then 5/10 was a resistance level that triggers a lot of profit taking. From 2/16 to mid-April you see it decline steadily towards ~ 21.40 before climbing back up to 25.85. The fundamentals of the company didn't change as far as I know. So given the stock's general volatility it appeared to me to that I could count on it declining towards at least the 23.00 level once again from usual market activity. As I look at things now, that was a premature call. The evidence for it wasn't strong enough, although I wouldn't be surprised to see it sink again. But things appear so iffy right now that I'd prefer to stick with intraday or two-day trades with this stock and just about every other one.
 
$CostAverageMAN:

Thanks for the tip. I have been watching some stocks in some of those sectors you mentioned, and I missed out on some good opportunities. I had TRF (foreign investment stock) on my possible short list for last Monday. But I didn't go with it and missed out on a $6 drop. Damn.
 
You must log in or register to reply here.
Back
Top