SE share: another swing trading success on the second try

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In last week’s column, we covered how a second try at swing trading in Lithium Americas (LAKE) has proven to be profitable. In case you missed the LAC stock example, we’ll get back to the topic with SE stock.




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Swing Trading Example: SE Shares

Limited sea (SE) is one of those stocks that produced phenomenal returns after the coronavirus crash. After the April 2020 tracking day, the SE stock produced a whopping 500% without a single close below the 10 week line.

After forming a base and posting another move, the SE stock started to found again. We added it to SwingTrader October 7 after tightening its 50-day moving average line and rebounding higher (1). One problem from the start was the lack of tracking of purchases after our entry. Although he closed with a gain of 2.8% for the day, it was about half of the gain he recorded earlier in the session.

The next day, SE stock retraced the previous day’s trading range and again closed near its lows with a small loss (2). Due to the weak start, we quickly abandoned the position the next day as it appeared to close below the 50 day line. (3).

Another second try pays off

A few days later, we again added SE stocks to SwingTrader (4). The follow-up day did not come until the next day, but individual stocks gave their own early indicators. Other patterns occurred and signals to buy continued to buy. In other words, the configurations were working.

In the case of SE stocks, we also had a relative strength line hitting new highs ahead of the highest price and trade volume in over a month.

The follow-up buy came quickly in this case and we took our first third of the profit later the same day with a 3% gain over our entry.

The weakness came the next day (5) but wasn’t bad when put into context. This is a loss of 1.1% after a gain of 7.5%. With so much cushion, you can afford to make room for one position. Although it closed low in the trading range that day, we still retained most of the gains from the previous day.


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Selling in force avoids losses

We took our second profit on the SE share after registering a 9% gain since our entry (6). It happened to be at a point near the top in the short term. The next day’s decline remained above the 5-day moving average, so we left some room for the stock (7). The rebound in the short-term moving average (8) was dull and stayed inside for a day, but was not alarming. When we broke recent lows and fell below the 5-day moving average, we decided to lock in the remaining profits. (9).

Our cushion above our entry allowed us to give more room to SE stocks, but the early sell turned out to be the best decision. Otherwise we would most likely have been shaken as the SE stock has moved below our entry. We don’t let a solid gain turn negative on us. It should be noted that the SE stock is currently finding support at its 21 day moving average line, so it may be possible to consider another swing trading setup down the road.

More details on past transactions are available to SwingTrader subscribers and testers. Free trials are available. Follow Nielsen on Twitter at @IBD_JNielsen.

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