BONANZA CREEK ENERGY (BCEI)
Ok, I’m always on the look out for new companies and beaten down stocks. I was using my handy-dandy scanner the other day and came across Bonanza Creek Energy BCEI 26,53 -1,85 -6,52%. I forget which criteria was flagged, but it was either percentage move during the session or moving average crossover. Regardless, I started doing some homework.
Turns out that BCEI is the epitome of beaten down. Yet another Oil & Gas Exploration company destroyed by the price of crude. Based in Denver, CO, this stock once traded near $63.00 per share back in 2014. Yeah, $63.00 per share!! I began reading SEC filings and earnings reports and they were in a significant amount of debt (still are but doing better) and now they’re missing interest payments, but 2017 may bring better luck. If WTI can remain above $50.00 per barrel then maybe, just maybe, BCEI can crawl out of the darkness.
Let’s face it…they’ve made it this far right? If they were going to go bankrupt they had plenty of opportunities during 2016 to throw in the towel. This is truly a gamble or speculation trade – buyer beware.
THEN CAME FRIDAY
Last Friday wasn’t my best day mainly due to the fact I was exhausted from a very long and volatile trading week. I had just cashed out of my Denbury Resources DNR 1,36 -0,08 -5,56% position and knew I wanted in on BCEI. I pulled the trigger at $1.25 per share while it was heading North and I was convinced it was going higher. Then it turned around…
Ultimately, I was right, I was just a day too soon. On Friday, I purchased 5000 shares @ $1.25 and sold them @ $1.16 at the closing bell. I hate to lose money. I mean it makes me physically ill, but I was so far up for the week I didn’t really consider it that big a deal so I killed the trade. For whatever reason I just wanted out for the weekend. Yeah, that turned out to be a horrible thing to do. Ok, ok, I’ll just say it…that was f**** stupid.
BCEI opened today at $1.19 per share and slowly climbed all the way to a high of $1.58 settling more than 30% up from Friday’s close @ $1.37 per share at the closing bell. I watched all day in horror as it continued to climb. I thought about buying at $1.37 around lunch and decided against it.
I am noticing something interesting in WTI Crude – it’s going down today! This is why I did not pull the trigger. I’m thinking we could see a sell off towards the end of this week or next before the Christmas holiday and before the end of the year as everyone takes profits. I’ll be patient this time and watch what happens.
NEVER LOOK BACK
I’m trying hard these days to let the mistakes go and concentrate on the future, but this one really pissed me off. I was right, I had it at a good price and I know it’s going higher. Sure, it’s high risk, but I knew that too and went in with my eyes wide open.
This is a prime example of how a seasoned trader can still make mistakes. I have learned several lessons in my trading career, but below are the top three (3):
1) BUY when stocks are going down and SELL when they’re going up
2) NEVER violate your original cost basis or close a position profitable, watch it continue higher and get back in thinking you’re going to keep making money. This is a really dumb move, but very easy to do.
3) NEVER look back or sit around debating what you should have done or what would have happened. It’s over. Move on. Realize that every day – literally every day – creates new opportunities to make money in the market. Stay calm, don’t be so hard on yourself and LET IT GO!
THE BOTTOM LINE
Yeah, I lost $500.00 roughly on Friday. I then lost another $1,500.00 in position gain today. That’s $2,000.00 total I’m down because I was a complete idiot. It happens…
The cool part is I bought Amazon today which made me a cool $1,000.00 and sold my Nvidia March 65 Call’s at 15% profit or $560.00 gain. I basically made what I would have on BCEI and that my friends…is the point!