Update May 10: Looks like I missed the boat. TCK.B gapped up almost 7% at the Monday open to $38.88. I won’t be chasing the market at this point as the reward/risk ratio isn’t appealing anymore.
Update: I got stopped out at breakeven (after commission) before I can post this piece at the end of the day. I’m back to all cash going into the weekend.
I am taking a dip in Teck Resources (TCK/B.TO) with 110 shares bought at $36.03. This is a trade to “buy when everyone else is in fear”. Following my assessment of the market yesterday, I don’t think things are that bad, yet. So I am establishing a small position in a strong company today.
TCK is trading on its 200 day moving average at $35 this week (Figure 1). Yesterday’s epic dive and recovery didn’t break this $35 support. So that’s a very good sign for TCK.
Tech Resources (TCK-B.TO)
Furthermore, $35 is an obvious psychological round number support. It is also above the recent low of $32.50 printed in February of this year as shown in Figure 1. The oscillator value (top of Figure 1) is making a positive divergence as TCK is testing this support level).
I entered today based on the 5-day intraday chart. This morning’s opening hour test of $35 support has lower volume than earlier this week (Figure 2). As such, I think $35 can hold. So I entered when the price shot above minor resistance at $36.
TCK-B.TO intraday snapshot at time of entry
The price drifted back under $35.50 after I entered but then reversed and tested $37. I moved my stop loss to breakeven as it touched an equidistance price opposite of my stop. Just so I don’t see profits turn into losses.
If I get stopped out today, I will not re-enter until after the weekend.
My target is $40 and original stop was $35 for about a 4 to 1 reward to risk ratio. I am risking 1.25% in this trade with a position size of 110 shares.
Teck ResourcesTeck Resources
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My name is Paul and I am a full-time engineer, part-time trader. Back in 2000, I deposited my $5000 interest-free student loan with an online broker. Since then, my interest in trading has become an obsession.
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[...] I wrote last Friday, I took a long position in Teck Resources (TCK-B.TO) at $36.03 but got stopped out at breakeven. In hindsight, the retracement after testing the $37 resistance held the 50% level near the [...]