Sunday, April 22, 2018

Trailing  Stops 


The back of my business card says:

What to Buy  (Leading Stocks in the Leading Sector)
How to buy  (Market open on a  "Follow Thru day")
When to Sell  (Trailing Stop/Stop loss at a defined loss target) 

In my post last week, I mentioned 10 stocks  (What to buy)  from My Stock Watch List that one should have exercised a small position at the market open on Wednesday April 11th  "Follow Thru"  day  (How to Buy).  These were the leading stocks out of the 25 stocks that were on My Watch List.  Market was in a confirmed uptrend and that was a sign that the conditions were favourable in the market to initiate a small position on the leading stocks to test the validity of the  "Follow Thru"  day. 


The last time we had a  "Follow Thru"  day on Feb 14th, the market took a down turn within 8 sessions and the  3 major indexex - $SPY, $QQQ and $DJI - slid down below the 50 day sma(simple moving average).  This time around once again, the 3 indexex began to slide down to the 50 sma within 7 sessions after a  "Follow Thru"  day.  Not all  "Follow Thru"  days will materialize with the indexes reaching new highs.  It is critical to have a loss target identified (when to sell) and specified in the Trade Plan.  If you don't stay disciplined with your stop losses, than you will end up with a small loss of  -4%  end up as  -7.15%  instead.  $SGH  was closed out using a trailing stop at  -4%  loss instead of letting it slide down to  -7.15%  at the end of the Friday session last week.    


Results of 10 stocks compared to the Indexes


Here are the results of the performance of the 10 stocks that were initiated with a small position 8 sessions ago.  You always want to compare the performance of your stocks against the leading index if you are aiming to out perform the market.  I have also highlighted the performance of the 3 indexes for the same period.

Indexes:
  1. $DJI      ... +0.23%
  2. $SPY    ... +0.55%
  3. $QQQ   ... +0.68% (Leading Index)


10 Stocks:

  1. $SGH     ... -4% (3 days in trade)
  2. $BZUN   ... -4% (2 days in trade)
  3. $SEDG   ... +0.55%
  4. $ADBE   ... +1.04%
  5. $ABMD   ... +1.84%
  6. $CASA    ... +1.96%
  7. $RHT     ...  +2.10%
  8. $CPRT   ...  +2.14%
  9. $BR     ...    +2.20%
  10. $CLR    ...   +4.64%
Overall performance of all the 10 stocks combined was   +0.85%  over the last 8 sessions.  That's   +25%  better than the leading index  $QQQ  performance and  +55%  better than the  $SPY (general market performance barometer). 


Mentoring  Program


Did you know what stocks you should have purchased on a  "Follow Thru"  day on Wednesday April 11th?

Do you know how to scan for  Growth Stocks  that will lead the market when institutional selling ceases and you have a  "Follow Thru"  day?

Do you know how to mitigate losses in your stock positions?

Make a commitment to learn:

  • How to  TIME  the Market?
  • How to find the  Winning Growth Stocks?
  • How to  Buy the  Stocks Right?
  • How to  Plan your Trade for Profit, Loss and Time in the trade?
  • How to  Sell your Stock Right?

Classes for  April  are full and we have just a few slots left for our  classes in May.  Hurry and secure your spot before they all fill up this week.  Schedule a  FREE  30 minutes of  "Discovery Call"   with us and see how best we can help you become a consistent and a profitable trader and an investor in  2018.  Don't procrastinate and pass up the opportunity of making a difference to your portfolio.  Start out now with a resolution to invest in your education.

Contact us at:

investorspotlight@gmail.com 


Happy Trading!

Amin 




Sunday, April 15, 2018

Timing  the  Market


Here is the quotation from Richard Driehaus (Market Wizards)

"Penalty for being Out of the Market on the wrong days is severe and human nature being what it is, those are exactly the days that most people are likely to be out of the market"


We had a  "Follow Thru"  day established after the market close on Tuesday April 10th.  According to  Mr. William J. O'Neil (Founder of Investors Business Daily), you must start dipping your toes back in the market during this day.  $SPY  was trading at the 200 day sma for 10 sessions since March 16th and most retail traders were stunned.  It was time to be in  CASH  to stop the erosion of the capital.  Classic mistake that most traders make is not to get back in the market during the  "Follow Thru"  day.  Our emotions gets in the way and we tend to overestimate the bad things happening in the market during correction.  We know from history that the best time to get back in the market after a correction is on a  "Follow Thru"  day.   Most of the leading Growth Stocks tend to break out in the first several days.  You  have to monitor the days that the market rallies and have a well researched Stock Watch List prepared.  Did you take some stock positions at the market open on Wednesday April 11th to test out the validity of the market uptrend ? 


Results  of  My  Stock  Watch  List 


One must always compare the performance of the stocks on a watch list against the performance of the indexes.  I had identified 25 stocks in my blog post on March 25th when the  $SPY  had dropped down to the 200 day sma(simple day moving average).  These were the stocks that were held up during the market correction.  They were all trading along the  21 day ema(exponential moving average) while the  $SPY (used as a barometer of the market direction)  was dropping all the way down to the 200 day sma in a correction territory.  These stocks also had an  RS  ratings above  90.  These stocks were supported by the institutions and they would be the ones that would tend to surge when the market goes into a rally mode.  Here are the results of these stocks performance for the last 3 weeks as compared to the performance of the 3 major indexes that I usually monitor:

Indexes:

  1. $QQQ   ... +1.80%
  2. $SPY    ... +2.75%
  3. $DJI      ... +3.51%


Watch List 25 Stocks:

  • +10% (out performed the best performance of the index -  $DJI  - by 2.85 times)


Stock  Positions  Exercised  On  "Follow Thru"  Day


Here are the  10  stocks  from my watch list, that one should have exercised a small position at market open on Wednesday April 11th, to test the validity of the new bullish trend established on a  "Follow Thru"  day.  Most of these stocks had an  RS  ratings of  94  and above.  7 of them were from the top  33  groups of the  IBD  197  groups.  Data from the  IBD  indicates that following such a strict criteria of selection has the odds of success greatly improved in your favour.  of these stocks were exercised at price below the resistance levels (I had identified these prices in my blog post of March 25th) at the market open price.  Market open buy points are identified in parenthesis.  It allows you a bit of cushion should the market rally fizzle out.

  1. $ABMD ...  $300.40
  2. $ADBE ...  $222.93
  3. $BZUN ...  $  48.03  
  4. $BR      ...  $107.49
  5. $CASA  ... $  29.54 
  6. $CPRT ...  $  50.42 
  7. $NOW  ...  $165.08
  8. $RHT   ...  $156.00
  9. $SEDG ... $  54.90
  10. $SGH  ...   $  45.03

Mentoring  Program


Did you know what stocks you should have purchased on a  "Follow Thru"  day on Wednesday April 11th?

Do you know how to scan for  Growth Stocks  that will lead the market when institutional selling ceases and you have a  "Follow Thru"  day?

If you were stunned with the market correcting for the last 3 weeks, than you need to make a commitment  NOW  to learn:

  • How to  TIME  the Market?
  • How to find the  Winning Growth Stocks?
  • How to  Buy the  Stocks Right?
  • How to  Plan your Trade for Profit, Loss and Time in the trade?
  • How to  Sell your Stock Right?

Classes for  April  are full with just a few slots left.  Hurry and secure your spot before they all fill up this week.  Schedule a  FREE  30 minutes of  "Discovery Call"   with us and see how best we can help you become a consistent and a profitable trader and an investor in  2018.  Don't procrastinate and pass up the opportunity of making a difference to your portfolio.  Start out now with a resolution to invest in your education.

Contact us at:

investorspotlight@gmail.com 


Happy Trading!

Amin 
      

       


    Sunday, April 8, 2018

    How  Good  is  Your  Stock  Watch  List


    "Market is in correction"  and the best advice I can give to every trader and investor is:

    • Stay in CASH.
    • Don't allow your winning stock positions to morph into a losing one.
    • Be very disciplined and use trailing stops.
    • Follow your Trade Plan.
    • Go to the beach, relax and watch the gorgeous sunsets (If you are like me and living in Florida).
    • Build your Stock Watch List.

    Market will eventually give you an opportunity to get in, just as it did on a  "Follow Thru"  day on  Feb 14th.  Your best chances of making a profit in a stock is in the first couple of days when the market goes into a  "Confirmed Uptrend".  This can happen only if you have a good stock watch list ready.  I had identified a trade on  $ABMD  in my post on Valentine's Day (follow thru day).  It's already  +16.82% (116.7% annualized)  in the last 7.5 weeks.  All the 3 major indexes are perilously at the 200 day sma(simple moving average) while  $ABMD  is hovering close to the 21 day ema(exponential moving average) for the last 2 weeks.  That is a sign of a stock that the institutions are supporting and not ready to give it up.  These are the kinds of stocks you want on your watch list.


    Compare  Your  Stocks  To  $SPY  And  $QQQ


    If you are an active investor and a trader that focuses on Growth Stocks, its imperative that you always compare the performance of your stocks to these two indexes.  Stocks that you own or stocks that are on your watch list ought to be the leading stocks in the  leading sector.  Get rid of the laggards and focus only on the leading stocks.  They ought to be the best stocks technically as well as fundamentally.  You have the best chance of profiting in a stock that has an RS ratings of 90 and above with the RS line approaching new high ground on the stock charts.  

    Here is  My Stock Watch List  of 25 stocks that was in my post last week with resistance lines identified.  $SPY  and  $QQQ  are hovering around the perilous 200 day sma while my stocks are all hugging the 21 day ema.  They all have an RS ratings above 90 - most of them have ratings of 93 and above.  These are the stocks that the institutions are holding onto and building their positions while they are dumping other stocks.

    1. $ABMD  (304.28)
    2.  $ADBE  (231.34)
    3.  $BZUN  (48.75)
    4.  $BR       (109.13)
    5.  $BURL   (128.93)
    6.  $CASA   (32.54)
    7.  $CLR     (58.89)
    8.  $CPRT   (50.71)
    9.  $DK        (39.43)
    10.  $ETSY   (26.23)
    11.  $EW       (138.48)
    12.  $FND     (51.48)
    13.  $HQY     (60.00)
    14.  $NOW    (175.99)
    15.  $NFLX    (333.98)
    16.  $NKTR    (104.93)
    17.  $OLLI      (60.49)
    18.  $PAGS    (35.80)
    19.  $PAYC     (110.25)
    20.  $PGR      (60.38)
    21.  $RHT       (157.22)
    22.  $SCCO    (53.78)
    23.  $SEDG    (55.55)
    24.  $SGH      (51.19)
    25.   $THC     (24.96)

    Mentoring  Program


    Were you panicking last two week when the market was correcting?  Did you know how you could have mitigated the loss to your portfolio?

    Do you know how to scan for growth stocks that will lead the market when institutional selling ceases?

    If you are feeling sick to your stomach with the market correcting for the last 3 weeks, than you need to make a commitment  NOW  to learn:

    • How to  TIME  the Market?
    • How to find the  Winning Growth Stocks?
    • How to  Buy the  Stocks Right?
    • How to  Plan your Trade for Profit, Loss and Time in the trade?
    • How to  Sell your  Stock Right?

    Classes for April are full and there are just a few slots left. Hurry and secure your spot before they all fill up this week.  Schedule a FREE 30 minutes of  "Discovery Call"   with us and see how best we can help you become a consistent and a profitable trader and an investor in 2018.  Don't procrastinate and pass up the opportunity of making a difference to your portfolio.  Start out now with a resolution to invest in your education.

    Contact us at:

    investorspotlight@gmail.com 


    Happy Trading!

    Amin 

      DISCLAIMER



      Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


      The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


      YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.