Tuesday, March 28, 2017

Stocks that survived the carnage

Here are some of the Growth Stocks that have done well. One thing to look for in strong growth stocks is to look for institutional support.   They account for  70%  to  80%  of the market volume. We as individual Retail investors ought to follow the institutions to benefit from profiting in the market:
$cgnx, $aeis, ,$veev, $amat, $idxx, $pcln, $crus, $momo, $atvi, $lrcx, $ulta, $vmw
These stocks held up well on  Friday  Mar  24   and   Monday Mar 27.   They did not breach the   50 day sma (simple moving average) while the other   3 indexex  -  $DJI, $QQQ  and  $SPY  breached them.   Institutions decided to hold on to these share and not supported them.
There may be sector rotation going on too into   Consumer Discretionary ($XLY)   and   Consumer Staples ($XLP)  Following are some of the stocks that are trading along the  10 day sma  while the market is correcting:
$mar, $hd, $low, $dis, $edu, $tal, $pnra (indicating strong RS line and pointing up last several sessions)

Happy Trading!

Amin

Monday, March 27, 2017

8 Week Hold Rule

I am a Growth Stock investor and I follow the rules of  Mr. William J. O'Neil (founder of Investors Business Daily)   When a stock makes a  +20%  gain or higher, it is always a good practice to harvest profits or atleast take some of the profits by lightening up on your position.  Seasoned investors avoid the greed of sitting tight on a stock for more gains. They know that the original risk in the trade is elevated because now you have your stock as well as your  +20%  profits at risk.  A true leading growth stock that makes a   +20%  gain in the first 2 to 3 weeks after a breakout is a sign that big institutions have an interest in acquiring more of those shares.  IBD has a an   "8 Week Hold Rule"   Institutions do not want to spook the market and show their true intentions.  The rule states that one should hold this stock for 8 weeks for a chance to have more gains and than evaluate the stock at the end of 8 weeks.   You can lock in your gains than or if the stock continues to gain profits and the general market is in a Confirmed Uptrend than continue to hold the stock until you get a sell signal.


How I Made  +6.26%  in 2 Weeks Trading  $ANET  (+163% annualized)


In My blog post on Monday March 13th, I had highlighted  $ANET  as one of the stocks that I was monitoring.  I tweeted the trade details on the tweeter on Monday  for educational purposes.  This was the stock that had broken out in volume  6  times the normal average daily volume during earnings on Feb 16th.  The stock rose more than  +20%  within days and began to consolidate for the next 12 trading sessions.  This was a leading stock in a leading sector and it kept appearing on several IBD screens including the IBD 50, stock spotlight, sector leader and stocks attaining new highs with institutional participation.  This stock invoked an  "8 Week Hold Rule"  If you did not have a position on this stock, you can initiate a new position during the consolidation period.  Market was still in a confirmed uptrend and   Technology ($XLK)  was the leading sector.  Following was the Trade Plan:

Entry: $124 (March 10th position initiated)
Profit: $136.40 (+10% target)
Loss:  $119.40 (-4% loss target)

Market was in a  "Confirmed Uptrend"   when the position was initiated.  Conditions in the market has worsened since than with  11 distribution days on record.  Most of those days are in a cluster in the last 10 days.  Currently we are in   "Market Under Pressure"    This is the time to be cautious in the market.  All the major indexex - $DJI, $SPY and $QQQ  are trading below the  34 day ema (exponential moving average).  $ANET  however is showing strength of a true leading stock with institutionl support because it is trading along the  8 day ema   Currently the stock is trading with  +6.26%   gain so far.  The risk in the trade will have to be managed with trailing stops because the market conditions have worsened.  That is a prudent thing to do.  You do not want to give up the profits you have made in this stock.  


Mentoring Service

If you would like to learn:

"How I Identify Winning Stocks and How I Execute and Monitor Trades with Trailing Stops"


Contact us at:

investorspotlight@gmail.com


Schedule a FREE 30 minutes  "Discovery Call"  with us and learn to how best our mentoring and coaching can help you become a profitable trade.


Happy Trading!

Amin


   




Sunday, March 12, 2017

How I Made  +46.66%  Profit on $AVGO  in 5 Trading Sessions

Last week I had highlighted the details of a short term  Bullish Put Credit Spread Option Trade   on   $AVGO.  The stock was extended   +5%  beyond its ideal buy point of  $208.85  but was still trending along its  8 day ema (exponential moving average)   Market was in a   confirmed uptrend   and we were looking for ways to lower the risk of taking a position in an extended stock and instead use Stock Options strategies to profit from the momentum of the stock.  There was a detailed   "Trade Plan"   in place to exit for profit or for a loss.  The stock continued trading along its   8 day ema   after initially dropping 2 points on Monday.  On Friday the stock broke out in heavy volume to punch thru past our profit target.   Our initial target was to close out the trade when  +80%  of Credit  ($400)  was attained with   $990   at risk.  The stock blew past our target and we ended up with  +93%  of Credit  ($462)  and only  $990   at risk.  We made  +46.66%    of the amount risked within just 5 trading sessions.  Look over the archived post of Sunday March 5th to study the details of the trade and how I managed that trade with my   "Trade Plan"   in place.

Stocks on My Watch List

This will be a week when Janet Yellen will finally be  YELLING  on wednesday for a rate hike.  No one knows how the institutions will react.  They could derail the bullish momentum that we have enjoyed since the November 8th elections.  The financial sector has been a huge gainer and some institutions may choose to harvest their profits and others may decide to add to their positions instead.  I have however identified some stocks that I shall be monitoring this week.  They are:

  1. $ANET
  2. $AMAT
  3. $AVGO
  4. $MCHP
  5. $IDXX
  6. $ZION
  7. $ULTA
  8. $ATVI
  9. $CMA
  10. $BABA
  11. $SCHW
  12. $MBLY
Some of these stocks are extended beyond their ideal buy points. They may retrace to their buy points and some may present opportunities for profits with Low Risk Short Term Option Trades.  Asian markets are trending up as I am writing this post on Sunday night.  They seem to like what they saw as good news with our jobs report and our unemployment going down to 4.7%.  Oil is also looking to trend down to less than $45 a barrel.  This is good news for the US market on Monday morning.

Mentoring Service

If you would like to learn:

"How I build My Stock Watch List and How I Execute and Monitor Trade"


Contact us at ...

investorspotlight@gmail.com


Schedule a FREE 30 minutes  "Discovery Call"  to find out how best our mentoring and coaching can help you become a profitable trader.

Happy Trading!

Amin

Sunday, March 5, 2017

Low Risk Trade 



In my post last week, I had highlighted a detailed case study on  $CMA   where you only risked less than   $1,000   to gain   +45%   in 12 sessions.  I gave my reasonings behind the decision to carry out a   Low Risk Bullish Debit Call Spread   on this stock instead of buying the stock.  The financial sector had been leading since the  'follow  thru'  day after the elections on Nov 9th and most stocks were extended beyond their ideal buy points.  It is risky to chase the stock once they get beyond the  +3%  past the proper buy point.  Utilizing   Options Spread Trade   on extended stocks is one way to profit from the momentum that we have in the market under current environment. 


Low Risk Trade on  $AVGO


In my post on January 23rd, I had highlighted  $AVGO  as one of the stocks on   My Watch List   that week.  The stock was trading at  $191  at that time and currently it is  +14%    The stock has been trading along the   8 day ema (exponential moving average)  ever since it appeared on my watch list on January 23rd.  It consolidated for 3 weeks in February to give us another opportunity to add to our position when   IBD(Investors Business Daily)   identified   $208.85   as a   3 weeks tight base   entry point.  Earnings was being reported on March 3rd and that precluded us as traders to exercise the stock position until after the earnings report.  Stock is now extended beyond  +5%  past its ideal buy point after the earnings report.  The stock is still trading along the   8 day ema   and the market is still in a confirmed uptrend.  The question that most traders ask now is   "Is there a way to still profit from this extended stock?"    My answer is  "Yes"


Bullish Credit Put Spread on  $AVGO


$AVGO   trades over   $600 million  (daily volume of shares X price of stock) daily.  It is a very liquid stock and there are weekly options available on them too.  This allows us plenty of opportunities to do a very short term trade to profit from the momentum that we are experiencing in the market right now.  Here are the trade details that one can exercise on Monday morning (not a recommendation but an exercise to practice virtual trade to learn from)

Trade:  Buy 8 contracts Mar17 $212.50 put and Sell 8 contracts Mar17 $215.00 put for a Credit of  $510:$990  Risk 

Manage Trade:  Monitor the trade to lose no more than  -50%   of the risk  ($445)  and close out the trade when  +80%  ($400)  of credit is attained.  We are looking for the stock to stay where it is or move just  +3%  from its current price in the next 2 weeks.  Close out the trade for loss if the stock moves  -3%  from its current price


Mentoring Service


If you would like to learn:

"How I Build My Stock Watch List and How I Execute and Monitor Trade"


Contact us at ...


investorspotlight@gmail.com


Schedule a FREE 30 minutes  "Discovery Call"  to find out how best our mentoring and coaching can help you to become a profitable trader.

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.


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