Placing a modest bet on IIoT Stocks

I decided to place a small speculative bet on a couple of Canadian Industrial Internet of Things (IIoT) stocks.

  • Buy SW.TO @ $37.47
  • Buy ITC.TO @$2.83

Both stocks have seen significant gains recently but I think the hype cycle has some room to run. Let’s hope I’m not the dumb money.

I have set stops at 10% below the purchase price on both to limit my downside.

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Out of Brookfield, Into Winpak

Earlier this month I bought three stocks that are highly recommended (A-rated) by Peter Hodson of 5i.  Two of these stocks have done well but one, Brookfield Renewable Energy Partners (BEP-UN.TO) has done poorly.  It was down over 6% at one point.  Normally I would sell a speculative stock that was down 5% or more (i.e., stop loss) but I neglected to set alerts for BEP.  Today BEP was up 2% so I took the opportunity to sell it for a 4.5% loss.  My other speculative stocks are up so I am not too distraught about this one.

I might have made a mistake when I bought Hodson’s A-rated picks.  Some of his recommendations are months old.  Perhaps I should have gone with the three stocks he recommended on BNN recently.  Accordingly I am taking the funds from the BEP sale and putting them into Winpak (WPK.TO), which dipped today.

  • Sell BEP-UN.TO @ $29.92
  • Buy WPK.TO @ $19.35

Stopped Out on Apple

My stop loss triggered at US$600 on Apple (AAPL) today.

  • Sell AAPL @ $600

The stock continued down to close at $580. I think it could go to $500-550, so I’ll wait to pick it up later.

POSTMORTEM

Writing today, 16th May, Apple is at $546 (9% lower than where I sold it, and 15% from it’s recent intraday high of $644).  Selling was a good call.

Is Apple Baked?

On 14th March I wrote that Apple’s (AAPL) stock seemed to be moving too fast. Well, four weeks later I think that the stock might now be running out of steam. The stock left its normal growth channel in early February and has moved hyperbolically towards a climactic top (a sharp increase in prices on heavier than normal volume). It has made three distinct pushes since then, indicated by green ovals in the chart below, each one shorter and weaker than the last – like a stone skipping on a pond and about to sink! I suspect it might make one more skip, perhaps up to US$650, and then sink back to its normal growth channel at around US$500.

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A drop from US$650 to US$500 will erase only two months of gains, but the psychological impact of Apple shares falling by 20% or 25% will be significant for retail investors’ confidence and could signal another cruel summer, like 2011.

I am moving my stop loss up to US$600 to protect against a quick move downward. I like the underlying company and hope to buy in again at a lower price after the climax is over.

UPDATE

Writing today, 11th May, this prediction was a good one.  Apple had actually peaked at the time of writing ($644 intraday), and fell to a low of $560 by 24th April (a 13% tumble).  I was stopped out at $600 on 16th April.

Is Apple Moving Too Fast?

I think Apple is moving up too fast. It moved outside of a well established channel on 6th February and is rising furiously. The volumes are also spiking up making me think that price increases are more the result of speculation than investment (even if the multiple is still reasonable).

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I am worried that Apple will peak and fall back into the normal channel, which could take it all the way down from the $590s to the $400s.

I have today placed a stop loss at $560 (5% below the current price). This limits my downside and ensures a profit. If the climb continues I can set the stop loss to a higher price and lock in even more profit.