247Bull Trading Portfolio: Three of our four trades are now guaranteed winners

The 247Bull Trading Portfolio employs a trend following strategy that looks to take advantage of companies that are breaking out from a period of consolidation. This article provides an update on existing trades, new trades, and possible future trades. 

Existing trades

Kimberly-Clark (KMB): On 22 January 247Bull went long Kimberly-Clark (KMB) at $87.25 as it broke above $87.00, a level which had acted at overhead resistance since August 2012. Immediately following its breakout the stock pulled back, however it has since begun to form a nice uptrend (green lines), and we will remain long KMB all the time the uptrend is intact.

The stop loss has been moved up to $89.00.

A 1 year daily chart of Kimberly-Clark Corporation (NYSE:KMB) (Click on the chart for a larger version)

A 1 year daily chart of Kimberly-Clark Corporation (NYSE:KMB) (Click on the chart for a larger version)

Chart courtesy of stockcharts.com

HCP, Inc. (HCP): On 25 January 247Bull went long HCP at $46.94 after it breached previous overhead resistance. Following its breakout HCP experienced a period of congestion, however it has recently overcome this and has begun to establish an uptrend.

The stop loss has been moved up to $46.00.

A 1 year daily chart of HCP, Inc. (NYSE:HCP) (Click on the chart for a larger version)

A 1 year daily chart of HCP, Inc. (NYSE:HCP) (Click on the chart for a larger version)

Chart courtesy of stockcharts.com

Kimco Realty (KIM): On 1 February 247Bull added KIM to its trading portfolio going long the stock at $21.00. Following its breakout KIM immediately established a powerful uptrend.

We remain long KIM with a stop loss set at $21.20.

A 1 year daily chart of Kimco Realty Corp. (NYSE:KIM) (Click on the chart for a larger version)

A 1 year daily chart of Kimco Realty Corp. (NYSE:KIM) (Click on the chart for a larger version)

Chart courtesy of stockcharts.com

New trades

On 1 February one of the stocks on our watch list, M&T Bank Corp., broke out above previous resistance (upper blue line) and we went long at $105.40. Since then MTB has pulled back, however it remains above our stop loss at $103.50, and we remain long the stock.

A 1 year daily chart of M&T Bank Corp. (NYSE:MTB) (Click on the chart for a larger version)

A 1 year daily chart of M&T Bank Corp. (NYSE:MTB) (Click on the chart for a larger version)

Chart courtesy of stockcharts.com

Possible future trades

None at present.

Final thoughts

The trend following strategy we are using does not utilise predefined levels at which profits are taken or at which trades are closed. Instead, it allows winners to run all the time they remain in a defined up (or down) trend.

Over time this type of trading strategy generates lots of small losses, however these losses are more than offset by a handful of big winning trades.

The use of stop losses is vital to the success of this strategy and we continue to raise our stops as the price trend develops. This allows us to lock in profits, and it is the reason that three of our four open trades are now guaranteed winners.

Another key aspect of this strategy is that it uses the overall market direction to its advantage making long bets in a rising market and short bets in a declining one.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>