Most people know jstantrades (@jimofthemarket) as a short term futures trader in the stockguy22.com VTF. What most people might not know is that I maintain a swing trading account for grain futures and other opportunities. It’s not the majority of my cash, but it’s enough I can take some interesting trades from time to time.
When there are imbalances in the market, like the recent crude oil selling to $40, I am able to take positions appropriate with the size of my account. I’m not a gambler like many traders; I size my trades for no more than a 5% risk on a trade. I also don’t have the luxury of having the ability to place the majority of capital in ‘sure thing’ trades.
If you are interested in oil stocks going forward you can look up the oil explorers and refiners on your own. Some of the best trades are likely over, at least in the near term, for the energy sector.
For the past year or so I have been delicately, and maybe not so discretely, mentioning regional banks – in fact any business that will benefit from rising rates over the next 5-10 years. I’ve had a few good trades in FITB, KEY, HBAN and RF.
When I talk to people about these trades last year they would look at me like I was crazy. “But the regional bank charts look so terrible.” – It’s always a good sign when people think you are completely nuts looking at a sector.
I tell them – “Wait for a market correction then pick up a few of these and hold them for a few years.” – Even more people look at me crazy. What? A market correction?
If you are a new trader and looking for ideas, it’s important to have patience and not force trades. Forcing a trade can be a traders worst enemy in swing trading, long term investing, and especially in my short term index trading.
Patience is a virtue.
So here is what you should do, put a few of these banks on a watch list and set some alerts 20-30% lower. Profits are made on an entry, not buying highs and hoping to sell higher.
I’ve attached charts for the regional banks that have a more than 200k of trade volume each day.