Stock Talk

New Year.....

The stock market has opened for the new year, time to get to work. I have been looking for more stocks to invest in with the $250 portfolio I opened. I am going to call it the project portfolio to save time. I have been following AOG again but have a small list of other stocks that I will look into more.

AOG- has been moving around this past week. It has been touching $0.06 and $0.07. Today, it kept brushing $0.07. Seems as though there is a lot of resistance at the 7 cent marker, as we saw before once we break through that marker, this stock rushes up. Possible trading plan is to buy in at $0.06 and wait until AOG breaks through the .07 roof. Another possible plan is to buy 4,100 shares at $0.06, totaling $254 after commission. Selling those shares, probably the same day at $0.07 for $287, after you factor out commission ($8), $279. After commission is taken into account we would make a profit of $25. Not a lot? On the contrary. Considering how much money we started out with $25 is a 10% gain. Seeing how often AOG keeps brushing these two extremes we could make the $25 then buy back in.

Usually you have to wait for your funds to settle, that takes about five days. Basically after you sell a position you have to wait 5 days before you can use the money you just received form the sale. However, you can do something called a free-ride. After buying in at $0.06 and then selling at $0.07 (taking our $25 with us) we could buy in again. This time we could buy 4,500 shares at $0.06 instead of 4,100. You just have to wait until the five days of the original transaction (the selling of 4,100 shares) has settled then you can sell the 4,500. There are some pro's and cons to this strategy.

The main pro is being able to make the $25 and buy back into AOG. We could secure our shares, more of them, and wait until the roof is broken. The main con is that if the roof is broken while we are still waiting for our funds to settle, we could miss out on some hefty profits and sell on the decline from the peak, a few days later. Either way there will be some profits. The question is whether you want to wait for the roof to break then take all those profits, or, sell at the roof of $0.07 take the $25 reinvest and risk waiting that the roof wont break until after your funds have settled.

The best scenario is that we buy 4,100 at $0.06 and sell at $0.07. Buy in again that same day at $0.06 for 4,500. Five days later, the roof breaks on $0.07 and we make more with our 4,500 then we would have with the 4,100. If AOG has found significant resistance and a better stock appears, we can just sell the 4,500 at $0.07, take our $29 and invest somewhere else.

Here is a quick link to AOG so you can see what I have been talking about.

http://finance.yahoo.com/q?s=aog

We could buy more than just 4,100 shares since our account is worth $297 with our previous trade, but, I like to have a small reserve of money for commission charges and to just have settled (available) funds to trade. My goal is to get to $350 by the end of January.

The bitter-sweet thing about the stock market is that it takes money to make money-- the stock market has a snowball effect. The more money you have, the more shares you can buy, the more shares, the more profits. Greater profits lead to more investment capital, etc. With our account starting with such a small amount, $250, in comparison to others, it will take some time before we start to make consistent profits of hundreds to thousands of dollars, but, it is possible. The small gain of $25 dollars now may not seem like a lot, but continually getting those $25-$60 profits in (hopefully every week) our account will grow until we can trade more often and bring in even more a week. Then the snowball effect will start to take place in front of your eyes.

.........New Hunt.

WIWS

Disclaimer: These are not recommendations to buy or sell. Invest at your own risk. Where Is Wall St. is not responsible for your own decisions.