TraderWise

There is a specific reason I do not buy falling knives, but every so often I make an attempt at one just to remind myself of why I don't like this strategy.  I tried to buy EnerNOC (ENOC) at the bottom of a range it has traded at the past 12 months a week and a half ago.  Today it broke below those lows of the past year and hence triggered my stop loss at $24.40.  This was a 3% loss...

EnerNOC (ENOC) has bored me to tears of late.  It is neither doing much bullish nor bearish - just a lot of neutralish (!)  I keep waiting for a breakout to load up, but it simply is doing nothing.  To give a chance to roar I will sacrifice it to the market gods and close out the very small position we had left.

I don't see any news event, but EnerNOC (ENOC) has already traded an entire day's worth of volume in the first 45 minutes, and is up 11%.  This has obviously taken it right back over the 50 day moving average.  Extremely frustrated on this one as it broke support last week, we cut back... and today it reverses massively.  This was our largest position at this time last week; now it's an afterthought..  Difficult to rebuy something up 11% ...

EnerNOC (ENOC) has impressively broken above resistance into the $29.30s; I have highlighted in the box below my first trade(s) of this stock - when we first bought near the 200 day moving average and then sold the stock in 2 batches (here) and (here) - leaving only a holding stake as of

Whew - as bad as the index is, there is some serious burning of brush in the small and mid cap area.  Lots of -6 to -10% type of action on my watch lists.  On the plus side, today has finally brought a few names down from the heavens, as their teflon performance is finally whacked with a baseball bat.  One such name is EnerNOC (ENOC)... the stock is down 6% and has retreated to it's first key support level so I will layer in a purchase here.

Usually I try to buy relative strength, but we have a relatively defined entry point on EnerNOC (ENOC) so I am going to attempt a more atypical trade.  Technically, the stock has bottomed out in the mid $24 to $25 area twice in the past year, and is back here today after a devastating day yesterday. Normally stocks that gap down like this, stay down for weeks if not months but as I've shown in other pieces lately this strange market will bid up anything and we have seen many immediate reversals.

The trade on EnerNOC (ENOC) worked out far more quickly than I anticipated... in no way, shape, or form is it normal for a stock to fall to its 200 day moving average and then turn on a dime and vault higher - especially a stock that has taken a beating for about 10 sessions in a row.  But much of the current market smells of not normal and we see the exact same behavior in the indexes over the past 6 months, so I guess I should not be too surprised.

The position in EnerNOC (ENOC) has worked out very well for us... after a purchase right at the 200 day moving average on the 23rd of November, the stock did a complete U-turn the next day and ran right into resistance.  We dumped 2/3rds on the 27th, for a 11% gain in a week... the velocity of the move surprised us, but we will never complain about such gifts.

At the time we wrote

Make that 2 material long positions...

DragonWave (DRWI) joined the "breakdown" party and my stop loss in the mid $10.90s hit; reducing our exposure by 60%.  All the same comments as I made for Atheros in the previous entry apply here.