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IvanLabrie
18. Jan. 2016 14:00

CALM: Trading at a major discount Long

Cal-Maine Foods, Inc.NASDAQ

Beschreibung

This stock is coming up from a strong base, acting as a bastion of strength in this market.
Dividend investors would be glad to add this to their portfolios here I'm sure, and I wouldn't mind either.
There's a nice techical entry if we're offered with prices inside the green zone in my chart.

There is an abundance of technicals suggesting this is a good buy, so I wouldn't hesitate on reccomending it to anyone.
We have the yearly moving average below price, as well as a great valuation right here, as derived from the PSR readings, which give clues about 'fundamental support' levels in this chart.
I'd reccomend allocating 6-7% of capital in it, based on the volatility, which with a 3.85% yield, and trading at 1 time sales (PSR) -despite the high P/E ratio- makes it an attractive long term entry.

Cheers,

Ivan Labrie.

Trade ist aktiv

Buying against support here looked good.

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Good progress here. Might want to trail stops to entry.

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Acting nicely.

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Great rally. We can trim position and add on setbacks.

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Trimming was wise, down a point.
Looking to buy dips.

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If we get oversold readings we can buy more...and reduce when it gets overbought again.

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Easy money so far.

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The pattern here is very interesting, clear accumulation. Buying dips is advised.

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Very resilient stock. Trading around positions is reccomended. Sell rallies, buy dips.

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This stock is absolutely resilient, selling rallies and buying dips is resulting excellent.

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Buy dips, sell overbought rallies, this is being accumulated, big time.

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Keeping all stops at 35 is a good long term strategy, then trail it up.

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Excellent build up, now ready for a rally.

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CALM fired a 15 day uptrend, we can book partial profits at the target on chart, then rebuy more when oversold.

Trade wurde manuell geschlossen

Let's book profits.
Last 53.36
Kommentare
vaicru
I follow you !
IvanLabrie
;)

Cutting down on the core position and adding on a retracement is a wise thing to do.
I'll be looking to add soon.
Mdotee.
Looks like we may have ourselves a rally here soon :)
IvanLabrie
Yes, yesterday's range expansion day is a good sign.
I'll post an update.
moneymaking
Great buying entry mate. Holding it for long term?
IvanLabrie
That's the idea, it's a high yielding stock, and has good valuation and relative strength.
Mdotee.
do you a SL in place while holding? Im in @ $50
IvanLabrie
Hi, I either use a 3 ATR stop loss, or no stop for these positions, and just base size on volatility.
You can protect the downside selling covered calls, or with different correlated plays.
My mentor (Tim West), posted a TSLA chart today, where you'd buy TSLA while shorting OIL, which created an uptrend (which has been going on for 3 years!).
Cheers,
Ivan.
Mdotee.
Awesome -- thank you. What do you mean exactly by base size on volatility? I saw TW's chart earlier, 1700+% return over 3 years is insane. Nifty trade. I can imagine so many pairs for CALM. A favorite would be to short CVGO, with a PE > 40 and no where near as elegant a balance sheet as CALM. Thanks for your insight!
IvanLabrie
I agree, CALM looks like a nice addition to any long only portfolio.
Pair trades can be really great.
Size based on volatility, I will find the value for the daily Average true range of 11 periods, and multiply it by 3.
This gets me a safe enough stop loss when buying against support.
I then determine how many shares to buy, to risk losing 1% when this theoretical stop would get hit (in that event).
In this case, the stop is around $40, so you'd have to do the math for the size based on that.
If you're building a larger long term portfolio, it might be wise to reduce risk to 0.2-0.5% instead of 1% per trade (up to your own discretion)
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