Sunday, April 23, 2017

Buy High ... Sell Higher 

My friends and relatives know that I have been trading and investing in stocks for the last 25 years.  Every once in a while, they will ask me as to what is a good cheap stock to buy.  My answer always is that I don't ever look at cheap stocks.  They are cheap because there is no demand for these stocks.  I will tell them that I prefer to buy stocks that are in demand and the price is appreciating.  This seems counter intuitive to them because they believe that one should buy low and sell high.  I just keep reminding them that  $PCLN  was a  $1,000  stock in October 2013 and now it is trading at  $1750.  That is  +75%  gain in  3.5 years.  The stock has been going higher by  +4%  to  +6.5%  during the last 3 earnings report.  They report 1st quarter earnings in first week of May.  It will be interesting to see what the stock does at that time.  Currently it is consolidating along the   8 day ema (exponential moving average)  It is one of the stocks I am monitoring this week.


Where are We Headed

This is a very busy week with over 70 major companies slotted to enter the earnings confessional booth.  We have giant Technology companies like  $GOOGL, $AMZN and $MSFT reporting on Thursday April 27th.  They account for  +20%  of the $NASDAQ index.  They will be the catalyst to jolt the market from its sideways consolidation of the last 6 weeks.  Lot of growth stocks are trading along an 8 day ema in a very orderly tight base of 3, 4, 5 or 6 weeks.  They are like a loaded spring and are looking for the earnings catalyst to either allow the bulls to take control of the market or just let the bears just take it down.  My lower and higher targets for the 3 major indexex are:

  1. $QQQ ..... 130 - 135
  2. $SPY  ....  230 - 238
  3. $DJX  ....  202 - 209
We could start seeing increased trading volume coming in on Tuesday with  $CAT, $MCD, $LMT and $BHI  slotted to report earnings.  April is the best month in the market and it is usually the second half of the month that propels the market higher traditionally.  This is because a lot of companies are slotted to release their earnings report during the second half of the month.

Stocks I Will Monitor This Week

The only stocks that I currently monitor are the ones that are trending along the  8 day ema and have an RS ratings of over 90.  These are the stocks that have the potential to break out if the institutions look favourably to the earnings release this week.

  1. $MKSI
  2. $SWKS
  3. $APO
  4. $CIM
  5. $CHTR
  6. $IBP
  7. $GTN
  8. $MOMO
  9. $SNPS
  10. $GMS
Once again, some of these stocks are good candidates for a low risk conservative short term Option Trades.

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