Sunday, December 4, 2016

Time to Look for a  "Super Stock"


Every year, I come across a stock that makes my year.   For me it was    $NVDA   this year. It didn't happen by an accident though.   It took a lot of work analysing the stock chart, anotating chart and writing a detailed trade journal for every trade that I methodically placed on the stock and options on the stock.   There are a lot of lessons learnt with every trade.   The key is to duplicate those trade set ups that have been profitable for you and to avoid doing what doesn't work for you.    It sounds like a simple idea but putting this into practice is what it is all about. 

Currently the outlook of the market per   IBD (Investors Business Daily)   is   "Uptrend Under Pressure"    We have 11 distribution days between the 2 major indexes  -  $SPY   and   $QQQ.   This is the time to be cautious.   It is also the time to protect your profits in a position.   Harvest the profits if the position has met your profit targets.   Follow your trade plan for loss exits as well and don't let your emotions dissuade you from closing out a losing posiition.   It takes as few as 3 to 5 sessions for the major indexes to slice through the    50 day sma (simple moving average)   I have illustrated several times in my post how you can still be ahead even if you lose half of the positions you take.   The key is to follow your trade plan for profit exits but also for   LOSS     exits.   That is how you manage your portfolio.


My  "Super Stock"  of the Year



During the month of December,  I shall highlight   $NVDA   as a case study for educational purposes.   This stock is  +160%   in the last 8 months.   It is reaching its peak now and there may just be very little juice left in the stock for such gains.    Stocks such as these appear on a regular basis but it takes the discipline to be totally engaged with the market on a daily basis.   Currently most of the growth stocks are extended and they are consolidating and building new bases.   This is when I do most of my work looking for that needle in the hay stack.   As a retail trader and investor, you don't have to trade every day and all different stocks in a year.    Once you identify a   "Super Stock"     such as   $NVDA,   you can trade the same stock and options on that stock all year long for substantial gains.   My posts for the next 2 weeks will highlight this strategy for you.      



My Market Outlook


I still have a bullish bias towards the market.   We can expect the market to consolidate this week, especially after having had such a good month in November.   Financial sector has been leading so far but they have come up too far already.   Lot of them have been consolidating for the past  7 to 10 sessions.   I am focusing my attention on the transportation sector  -  airlines, railroads, truckers and shippers.    I would suggest you take a look at the stock charts of   $FDX   and   $UPS.   December is one of the best months in the stock market.   This week will determine where the market will be heading and what sectors will the institutions favour.   


Be sure to look over my tweeter account @  spotlightamin    I tweet some of the stocks I am monitoring and some basic facts about their performance.   Be sure to retweet any content that you find useful to you.   This way we get a wider community of traders and investors involved in the discussions.   It will benefit all of us and we all get to learn from each other.




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.