Sunday, December 18, 2016

How Do You Find    SUPER STOCKS   like   $NVDA


In my post last week, I had highlighted how    $12,000    of profit was made with 5 stock trades on   $NVDA   in the last 7 months.   Lot of my readers and followers had a lot of questions directed to me in the last few days as to how did I come upon such a winning stock.   I had not given this question much of a thought in the past.   Every year for the past several years, I have come across such a stock with regularity.   It is not mere luck though.   I have stayed disciplined in building    My Stock Watch List    every week and stayed engaged with the market daily weather the market was in a   "Confirmed Uptrend"   as it is currently or when the market has high number of distribution days and   "Under Pressure"   or in   "Correction"  


I am on a 2 weeks vacation right now on a cruise to South America.   One of the the books that I read in the last several days was   "How to Make Money in Stocks"   by  Mr. William J. O'Neil (founder of   Investor's Business Daily)   I read this book every so often and I always learn something new every time I read it.   There are over 300 stock charts in the book with annotations and they help explain what Mr. O'Neil is trying to convey.   One of the remarks he has made in the book struck me very hard and I will share that remark with you:

"Over the years, I've found that only one or two out of ten stocks that I've bought turned out to be truly outstanding and capable of making this kind of substantial profits.   In other words, to get the one or two stocks that make big money, you have to look for and buy ten"


One of the things that I have impressed upon my students in my mentoring services is to do   "Virtual Trades"   This is a simulation and a practice run to sharpen the skills of trading.   It helps in identifying the stock personality and how best to trade them.    I do a lot of virtual trades as well and that is how I come upon winning stocks such as   $NVDA   that makes my year.


Virtual Trade on   $RDN

If you have ever been on a cruise ship, you would know how expensive the internet service is and it is worst than a dial up wifi - to add insult to the injury.   I did however manage to do my routine of building  My Stock Watch List and analyzing the market.   I did a thorough analysis of   $RDN   to see what the institutions are doing with this stock.   This is what I found:


  1. July 5th it broke out with +300% above average daily volume at $9.88 and within 9 weeks  +42.10   profit was made at $14.04  (we had a follow thru day on July 1st)
  2. Oct 12 it broke out with +150% above average daily volume at $13.79 and within 8 sessions  +6.24%   profit was made at $14,65
  3. Nov 9th we had a volume surge of +300% above average daily volume followed by volume surge of +200% on Nov 10th (we had a follow thru day on Nov 9th)
  4. Nov 16th we had a volume surge of +400% and stock gained   +16.59%   by Dec 16th


Could this be a   Super Stock?   I follow the lead of the institutions since they are the ones that account for the price moves of a stock in the market.   They have shown a commitment to the stock with their sheer volume in the past 6 months.   The stock has already made   +78%   since July 5th.   Currently the  RS rating is  91  and the  RS line is strengthening.   The stock is extended and we have   10  Distribution days    between the    $NASDAQ   and   $SPY    This would be a good stock to do a virtual trade on to verify if this could become a super stock.


My virtual trade would be:

Entry ... $17.75
Exit for Profit @ 10% ... $19.53
Exit for Loss   @ -4% ... $17.04
Time to exit ... Prior to earnings report on Jan 26



Happy Trading!

Amin



  




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