As of 08/11/2020
  Indus: 27,687 -104.53 -0.4%  
  Trans: 10,890 +24.59 +0.2%  
  Utils: 822 -19.04 -2.3%  
  Nasdaq: 10,783 -185.54 -1.7%  
  S&P 500: 3,334 -26.78 -0.8%  
YTD
-3.0%  
-0.1%  
-6.5%  
 +20.2%  
 +3.2%  
  Targets    Overview: 07/31/2020  
  Up arrow28,150 or 25,000 by 08/15/2020
  Up arrow11,100 or 10,050 by 09/01/2020
  Up arrow870 or 800 by 08/15/2020
  Up arrow11,300 or 10,200 by 08/15/2020
  Up arrow3,500 or 3,250 by 09/01/2020
CPI (updated daily): Arrows on 6/29/20
As of 08/11/2020
  Indus: 27,687 -104.53 -0.4%  
  Trans: 10,890 +24.59 +0.2%  
  Utils: 822 -19.04 -2.3%  
  Nasdaq: 10,783 -185.54 -1.7%  
  S&P 500: 3,334 -26.78 -0.8%  
YTD
-3.0%  
-0.1%  
-6.5%  
 +20.2%  
 +3.2%  
  Targets    Overview: 07/31/2020  
  Up arrow28,150 or 25,000 by 08/15/2020
  Up arrow11,100 or 10,050 by 09/01/2020
  Up arrow870 or 800 by 08/15/2020
  Up arrow11,300 or 10,200 by 08/15/2020
  Up arrow3,500 or 3,250 by 09/01/2020
CPI (updated daily): Arrows on 6/29/20

Bulkowski's Coldwater Creek Trade

 

 

Coldwater Creek Trade: Backstory

A chart of Coldwater Creek (CWTR) on the daily scale

Let me tell you about a trade I made in Coldwater Creek (CWTR, daily chart).

By late April 2009, many stocks had doubled in price and were bumping up against overhead resistance. I show the stock hitting such resistance by the green line at point A.

When price closed above this region, I pounced and bought the stock. Since I was and still am concerned about the market, my position was just 1/4 of what it used to be a year ago.

Coldwater Creek Trade: Buy Again?

The stock moved sideways for several days as if trying to decide a direction, but then it found its legs and shot up. Midway though the rise, I doubled my position.

Since I was buying stocks often during that time, I did not fill in some of my notebook for the trade, so I do not know what my target price was.

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If you look at the longer-term chart (weekly, for example, going back a few years) you will see a loose congestion area from 3.40 in January 2008 to a high of 8.31 on September 2008. My guess would be a climb to 8, which is also the site of a small knot of congestion in October to December 2007. That tight area would concern me.

If I wanted to hold the stock for several years, then I would expect it to push through and top out at 19. That is where numerous valleys bottom starting in late 2005. Buying at 3.50 and holding to 19 sounds like a worthwhile endeavor to me. Of course, the stock, the company, the market, and the economy would all have to cooperate. That is a tall order but in three years, who knows?

Anyway, I let the stock flop around and then it started the second leg of what looked like a measured move up chart pattern. Notice that leg B nearly matches the slope and extent of leg C. If the measured move up plays out as expected, price will retrace back to the corrective phase -- which is the horizontal movement between B and C.

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Coldwater Creek Trade: Time to Sell

I looked at the chart and took a tip from my day trading experience. I saw three candles with little overlap (the three days before the black candle when I sold). That means a strong price run has begun. I placed a stop loss order a penny or two below the low of the white candle (the highest one on the chart), expecting to trail the stop upward as price climbed.

The next day, I was stopped out when the f%^*ing thing hit my stop. I felt as if I was cheated out of a profit. Today (Monday night as I write this), the stock has rubbed salt into my wounds by closing up 2.4% even as the Dow has tumbled 187 points.

On the first trade, I made 83% and the second one I made 61%, but I still feel as if I lost big.

A chart of Coldwater Creek (CWTR) on the daily scale

Coldwater Creek Trade: Aftermath

Shown is a more recent chart of Coldwater Creek on the daily scale. I marked the two buy locations as well as when I sold.

Price cooperated and dropped to A after I sold which always brings warmth to my heart. But then it had the audacity to recover and post a new high as the general market climbed.

According to S & P, they rate the stock a hold while Ford has a sell on it. S & P says that the company faces increasing competition and slower store growth in 2010, so I threw it back on the discard pile instead of placing it on my shopping list.

Based on what I see, this stock could defy the rating agencies and continue moving up.

-- Thomas Bulkowski

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See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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