Baytex – Investors vs Flippers & Volatility All longs and momentum traders,
I think it is wise to determine which strategy works best for every individual.
I think it’s a great idea to be both a trader and investor, when you have enough time to be thorough, and monitor stock’s price and events daily. To do this properly is a lot of work, and I was doing that for a time. At some point in the future, I will do it again, because I enjoy doing it.
Trading around a core position:
A volatile stock on the rebound, is ideal for this kind of strategy. Baytex has been, and will probably continue to be, a great stock for this strategy.
Say you had 10,000 shares gathered from pandemic times at much lower prices and held until May of this year. This trading around a core position strategy is to accumulate shares, rather than accumulate cash for this example.
Using 90% approximate of weekly tops and bottoms, based on the opening price for the week. Start with 10,000 shares.
Week of June 6th, Sell 3000 shares at $9.02 for $27,060.00 and hold the cash for the next pullback.
Week of June 20th Buy 4800 shares at $5.57, and some leftover cash goes to commissions paid.
Reallocate holdings: 11,800 shares becomes 8800 shares long core position, and 3000 for trading.
Week of June 27th Sell 3000 shares at $6.91 for $20,730.00 and hold for pullback.
Week of July 4th Buy 3900 shares at $5.31 and some leftover cash goes to commissions paid.
Reallocate holdings: 12,700 shares becomes 9700 shares long core position, and 3000 for trading.
Week of July 25th Sell 3000 shares at $6.97 for $20,910.00 and hold for pullback.
Week of Aug 2nd Buy 3700 shares at $5.58 and some leftover cash goes to commissions paid.
*** Week of August 8th, a bullish engulfing pattern is observed. Strategy on hold until another run up over $9.16 is made. (This bullish engulfing pattern really did happen!)
Summary: Holding 13,400 shares long, and you are glad to pay some tax on this effort, because it’s better to pay tax than to not pay tax! Depending on your situation, this tax amount could be more, less, or offsetting.
The only downside to this strategy is if the stock moves higher, and you are not able to buy more shares lower. If this happens, your average core position cost is obviously lower, and you still have your core position. It’s a no lose situation, and why many people use this strategy.
If there is a buyout event, or other stock moving news to the upside, then your core position benefits from the move, and you re-evaluate the next move.
I used to post some support and resistance levels, and they are still there. Above the CAD $8.80 level, there is not much trading history. After the first of the year, we could see moves higher when new money, and profits from sector rotations out of technology move into Baytex. The bullish engulfing pattern is real, and although it is not after a long term, price crashing bottom, it is still significant.
For some of the newer investors trying to learn, how I make my weekly Sharpe Chart is in the link below. I would not recommend looking at daily interval charts, because the time-frame is too short. I also like to use quarterly charts of indexes for broader market trends. Intra-day charts are best used to explain unusual activity, like we have seen near the close recently. I would not use them for anything else.
Message Board Distorters Post
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Baytex and those who make the markets.
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My Baytex Chart - For Newer Investors
https://stockhouse.com/companies/bullboard?symbol=t.bte&postid=34646149