As I am reviewing trading history for the week, I missed a limit buy order that went off late Friday. On Monday, we had sold just about all our BHP Billiton (BHP) [Oct 26, 2009: Bookkeeping - Sold Most of BHP Billiton (BHP) - Looking to Rebuy Soon] in the mid $72s anticipating some dollar strength to knock these commodity stocks down.
The chart on Monday looked like this...
The stock literally moved the rest of the week as we called it on Monday; both gaps filled in succession so we bought per our playbook, first a smaller tranche and then a larger one.
Wednesday, as the market was in freefall we simply bought back our original stake in the $68s quickly lowering our cost basis, but we were still aiming for the gap at $65
That hit late Friday. Doesn't mean BHP cannot continue going down.... if the dollar keeps running all commodities will be trashed but we were able to lock in gains, and swing around a position to rebuild it at a lower cost basis. If it falls too much farther from here, we'll exit but from a lower cost basis and hence a smaller loss. Like so many of the stocks in our watch lists and in our holdings, the 50 day moving average has been broken so potential for much larger drops in the stock price await. We'll give this one a leash up to somewhere near $62; with a potential double top and Asia (BHP is Autralian based) surely to open ugly Monday, we might be out of this position quite quickly..
Position size after both purchases went from 0.1% to about a 1.4% exposure.
The chart now...
Long BHP Billiton in fund; no personal position