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Stock Picks, 4-17

|Includes: Nutrien Ltd. (NTR), ONP

      I'm in a tough position. Friday made it look like the market is about to enter a down segment. Do I exit my positions at a loss? Do I hold them for the intermediate term and wait for them to go back up? Do I set stops and ignore them? It's a weird situation. I'm going to quickly pull it apart and make a decision. Orient Paper Inc. is a fundamentally sound company. This week was the first time in 2 months that it's spent more than 1 day above the 13-day moving average since 1-19. This would suggest a week-long bullish sentiment, even if it began to fade towards the second half of the week. I'm going to stick with Orient Paper. It's got a very solid balance sheet and is a good China play. However I'm not going to lose my shirt, so I'm setting a stop a little above 9 so I can't lose more than 8%. There is no support until 8.28 for ONP, and I'm not losing 20% on this trade. If it falls to their and bounces off, well then I'll buy it back.

     Potash has continued to fall even as I hold on and watch in surprise. However, it is right at a supporting trend line going back to last October, so I'll hold on a bit longer. If it falls through this support, and through the bottom line of the ascending triangle, well I have a stop set at 100. I'll lost a little bit more than I'd like if it sells at 100, but oh well. I'll lose about 15%. Worse things could happen. Hopefully It will bounce of support at one of these two lines. 

      Although the overall market isn't in this formation, I have found a countless number of stocks that have formed ascending triangle formations over the last year. This formation shows a weakening in an uptrend. If these companies start to break through the bottom of these triangles during this next down segment, it could be deep and long. Something to watch. For now, I'm holding on to both of my positions, but with stops set and ready to fire.

Happy Investing,

              Charlie



Disclosure: Long both ONP & POT.