Trade Log Week 1 - MUTIS by zhouwenjuan

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									                                Trade Log Week 1
                    E D T             I N V E S T M E N T S
                         Manchester University Trading and Investment Society
Objective
To maximize returns on capital through investing in large-cap companies and ETFs.

                                     Trade 1.1 – Apple Inc. (AAPL)
   1) What are the Fundamental or Technical reasons behind the trade
Apple is a company with an excellent track record. The share price has increased by more than 36%
since the beginning of 2012 and we have strong reasons to believe that this strong trend will continue.
We think that the release of the iPad 3 on the 7th of March will cause the share price to skyrocket and
therefore, we decided to go long on AAPL.
   2) What are your expected “Take Profit” and “Stop Loss” price.
Take Profit - We have no set “take profit” price for Apple because with the release of the Ipad 3 it is
uncertain how high the share price might go.
Stop Loss - $505.00
   3) $70,873.40
   4) Riskiness of trade.
              o Analysts suggest that Apple shares are severely overbought and that there could be a
                  fallback in the stock price, therefore, we think this investment to be fairly risky.
                  · Possibility of adverse movement – There is a possibility of adverse movement;
                  however, we believe that it is rather unlikely with the upcoming release of the iPad 3.
                  · Loss expected at “Stop Loss” price – $3,458
This is acceptable because the amount is lower than our pre-specified "stop loss" requirements.


                                   Trade 2.1 – ConocoPhillips (COP)
   1) What are the Fundamental or Technical reasons behind the trade
       The recent tensions between Iran and US are likely to escalate in the new few months keeping
       the risk premium in oil prices. This should continue to keep energy profits high.
       In a low yield environment, ConocoPhillips provides a 3.5% dividend and has raised its
       dividend at an annual rate of over 11% annually during the past five years.
       The stock is showing good technical strength and recently crossed over its 200 day MA
       COP should benefit as its splits off its refinery assets and becomes a pure play E&P stock.
       The company has beat earnings estimates by at least 10% over consensus during the last three
       quarters. Given high oil prices and rising gasoline prices, I would look for that outperformance
       to continue for the next few quarters.
       COP is cheap at under 9 times forward earnings and just over 5 times operating cash flow.
   2) What are your expected “Take Profit” and “Stop Loss” price.
Take Profit - $85 / Stop Loss – Falling below 200 day Moving Average
                                 EDT Investments • Page 2 • email




   3) $54,355
   4) Riskiness of trade.
We believe that COP has the potential to provide good return over the longer period (4-5 weeks). As the
stock is in bullish pattern we will use technical indicators to indicate possible adverse movements.
         Loss expected at “Stop Loss” price – We do not have pre-specified stop loss price, but a
   possible fall below the 200 day Moving Average is clear signal of trend reversion.


                                     Trade 3.1 – JPMorgan (JPM)
   1) What are the Fundamental or Technical reasons behind the trade
       Although the US banks’ valuation is at its highest since July 2011 we bet that they will continue
       to grow. Since the end of November 2011 the share price of J.P.Morgan is in a continuously
       bullish pattern. The banking institutions largely outperformed the market last week.
       The major reason we had was a fundamental one. In the Wednesday issue of the Financial Times
       newspaper there was information about the firm belief of the chief executives that their company
       will continue growing in 2012: “JPMorgan Chase's (JPM) CEO Jamie Dimon assured investors
       with certainty that last year’s revenue declines were temporary.”
       Combined, these factors make JPMorgan extremely attractive to us.
   2) What are your expected “Take Profit” and “Stop Loss” price.
       Stop Loss – 37 / Take Profit – 44
   3) $51,522.49
   4) Riskiness of trade.
       Possibility of adverse movement
       Banks’ shares prices are usually highly volatile. There is high risk of adverse movements. Our
       strategy is to follow closely the price movement and take decisions quickly and accurately.
       ·      Why is this acceptable?
       This stock’s volatility certainly does not go much over similar stocks’ one.


                            Trade 4.1 – ISHARES SILVER TRUST (SLV)
   5) What are the Fundamental or Technical reasons behind the trade
After Federal Reserve chairman Ben Bernanke's speech last week, prices of many precious metals fell
dramatically. We decided that it is a good time to buy SLV because we assumed that the low SLV price
will be only a short-term phenomenon. Furthermore, we use SLV to diversify our portfolio.
   6) What are your expected “Take Profit” and “Stop Loss” price.
Take Profit price – $35.58 / Stop Loss price – $32.20
   7) $84,725.00
   8) Riskiness of trade.
           •   Possibility of adverse movement
Due to the strong correlation between gold prices and SLV price there is a possibility of adverse
movement, mainly because if the US dollar strengthens, gold prices will decrease.
                                  EDT Investments • Page 2 • email




           •   Loss expected at “Stop Loss” price
The loss expected at stop price is $4,225.00
              o Why is this acceptable?
This is acceptable because the amount is lower than our pre-specified "stop loss" requirements.


                                  Trade 5.1 – United States Oil (USO)
   1) What are the Fundamental or Technical reasons behind the trade
We based our decision on the report by Press TV, Iran’s state-owned English-language television
network, which said that world’s third largest oil exporter had stopped sales to Netherlands, France,
Spain, Italy, Greece and Portugal (European oil embargo). We were expecting high demand for US Oil
and any other oil exporter around the world. An increase in price happened but it was only by 0.39%.
   2) What are your expected “Take Profit” and “Stop Loss” price.
Take Profit is $41.00 / Stop Loss is $39.00
   3) $61,155
   4) Riskiness of trade.
           •   The risk of this trade is coming from the fact that these news turned out to be wrong.
               Later on the Ministry of Oil in Tehran denied the report.
           •   The loss expected at “Stop Loss” price is $2000
           •   This is acceptable because the amount is lower than our pre-specified “stop-loss”
               requirement.


                                         Trade 6 (Closing trade)
Sears Holdings (SHLD)
   1) What are the Fundamental or Technical reasons behind the trade
After the impressive 32% increase in the stock price, Sears Holdings did not make any significant
moves. The stock price was moving in a channel between $68 and $72. Most of our technical indicators
were giving bearish signals and we have decided to close our position.
   2) Profit/Loss in trade - $20,364 Profit
   3) Reflection
           •   Most profitable Trade of the Week
Our best trade till now. We will be looking for similar stock price breaks in the future.




                              Pie Chart of Fund Capital as at 02/03/2012
EDT Investments • Page 2 • email




                   GOOG
                   INTC
                   AAPL
                   CAT
                   BAC
                   GLD
                   XOM
                   C
                   BMY
                   AMZN
                   COP
                   JPM
                   SLV
                   USO




                Equities
                Comodities

								
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