Sidenor stock (SIDE – Athens Exchange) is another Greek stock pick after [intlink id=”1197″ type=”post”]HTO[/intlink] and [intlink id=”1227″ type=”post”]Viohalco[/intlink]. I began trading the stock this week after a breakout in the daily chart. Buying 2,000 shares at €2.73 was quite easy as the liquidity increased the last few days, strengthening the prediction for an evolving uptrend. Since the breakout, SIDE stock found resistance at €2.80 but also support at €2.60 according to the more detailed 60-minute graph. So, my risk is about 0.15-0.20 per share, while I’m looking to scale out up to €3.25 (20% gains) with my first profit target around €3.00. If the stock’s price climbs above €3.30 I will still hold 500 or so shares to take advantage of a much longer uptrend.
Usually I don’t like trading breakouts. I’d rather wait for the stock’s price to verify the breakout by retracing back to the support level of the breakout, before I begin trading the stock. However I believed this particular breakout was much more important than others, as the volume increased dramatically on that specific day, accompanied by a gap in the daily graph while the green candlestick didn’t have any shadows! For all those reasons I went on to buy SIDE stock on 18th of January which was a falling day. The next day the stock resumed the short-term uptrend, having retraced just 15 cents. Such a small retracement indicates a fast and strong trend, while a triangle is being formed as the stock is trying to overcome the resistance level at €2.80.
Scaling out is a trading method I’m very fond of. In order to secure profits quickly but also to catch a big drift, I trade out half of my position 20-30 cents upwards and then trade out 25-30% at the next likely resistance level. At the same time in case I have hit the first profit target, I move my stop loss up to the breakeven point in order to not risk any money in the trade overall. In case the second target profit is hit as well, I am left with 20% of my initial trading position to manage. That small portion of my position can eventually be more profitable than the rest 80%, if I happen to have entered a long-term uptrend. I can then hold shares for months to come.
In the case of Sidenor stock, I plan to trade out 1,000 shares at €3.00 and 500 more at €3.25. That kind of trading will bring €500 to my trading equity and I will still have got myself a risk-free trade of 500 SIDE shares. If the Greek stock market reverses its long term downtrend, while I surely won’t hold many shares, I will still take advantage of a huge movement while risking no money.