Bought/Sold 250 TCK.B.TO @ $34.10/$33.68, Loss -1.2%

What I thought would be an intermediate term hold turns out to have lasted mere minutes. I bought Teck Cominco (TCK.B.TO) after a small bounce at $34 support during lunch today. Figure 1 shows the clear support level. Also note the fact that my recent shorts haven’t been working, so I thought I would go with the flow and go long.

Teck Cominco (TCK.B.TO)

However, the market edged lower almost immediately after my long entry (something I haven’t done in a while). TCK cracked the $34 support swiftly to $33.80, my mental support. My alert was sounded and I kept an eye on it afterward.

But then not long after $33.80, my hard stop at $33.70 was filled and TCK traded down to $33.66 or so. It has now stabilized around $33.80 as of 2pm. Figure 2 shows the intraday chart of TCK.B.TO.

TCK.B.TO intraday chart

Loss for this trade is ($33.68 – $34.10) * 250 = -$105 – $4.95 * 2 commission = -$114.90 = -1.2% of account. My account is now experiencing a 3.4% drawdown since the high on June 8th.

I can’t help but feel that this was a stop hunt. TCK is creeping higher at the moment. However, as my initial position was stopped out, I am not going to re-enter this trade just yet. Let’s see what it does near the close today.

I am labelling this particular trade as a bad trade because my stop was clearly too tight based on the time frame that I am observing. I should have reduced my position size and widened my stop to account for the recent volatility.

Update: TCK gapped down 7% the day after. At least my exit was timely.

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