Monday, May 29, 2017

+180%   Annualized Return  ...  $VEEV

How is that possible when the general market - using  $SPY  as a barometer - does only  +8%  to  +10%  every year?   

Simply answer:
  1. Invest in Growth Stocks
  2. Buy  'High n Sell Higher'
  3. Learn the IBD (Investors Business Daily) system of  CANSLIM investing
  4. Have a Trade Plan 
  5. Mitigate risk and control your losses
How come you don't hear this on  CNBC  or  FOX  or  Bloomberg  tv channels?   They are not doing you any favours.   Take it upon yourself to learn the system and take control of your own finances and your retirement account.   Share this post with your financial advisors and your professors in colleges.   They will be exposed to an idea that they may have never encountered. 

  I had shared my trade on  $IDXX  in my post on May 14 (2 weeks ago)  where the stock had  +14.79%   return in 9 weeks  (+85% annualized)   In my post this week I will share the steps I took to identify the stock  - $VEEV -  and timing its entry.   Once the position was taken, I shall show you the steps I took to monitor and manage the trade and make adjustments in the trade plan along the way as the stock headed towards its earnings confessional booth on Thursday May 25th.  

$VEEV  Trade  of  the  Week 

  1. 3/15 ... stock broke out from  $48.05  buy point in confirmed high volume and quickly ran up over 5% within 5 sessions.   Stock went through a 3 weeks tight consolidation pattern.   We had a major distribution day on  3/21 but the stock held up and stayed above the 8 day ema(exponential moving average)
  2. 4/20 ... stock broke out from a 3 weeks tight pattern in confirmed high volume.
  3. 4/21 ... Took a small position - since it was beyond the  +5%  buy zone and the risk was elevated.   Trade plan was for entry at  $52  with a  +10%  profit  target at  $57.20  and a loss target of  - 4%  at  $49.92.
  4. 5/5 ... RS line was reaching new high ground and pointing up.   RS ratings had increased to  95  and the stock had moved up from IBD group   49  to  22 within 2 weeks in the trade.
  5. 5/11 ... Had a trailing stop at  $54  to protect profits in the trade.
  6. 5/15 ... profit target was met but chose to use trailing stops and adjust the trade plan for more than  +10%  gain instead.
  7. 5/16 ... price moved up to  $59.09  in volume 2 times the average daily volume.   Trailing stop was moved up to  $55  to protect the profits in the trade.
  8. 5/17 ... We had a major distribution day where the  $SPY  and  $DJI  both plummeted to the  50  day moving average but the stock showed institutional support and kept up at the 8 day ema.   Major networks were predicting doom n gloom.   Stock closed at 15 cents above my  + 10%  profit target.  
  9. 5/23 ... Raised the trailing stop to  $57  while there was more trading volume coming in and the price continued to surge past the 8 day ema.   Earnings report was due within 2 days.
  10. 5/25 ... Earnings report was due after the close.   There was increasing volume for the past several days and the stock was surging.   Chose to harvest profits and closed out the position at  $61  for  +17.3%  profit  in 5 weeks (+180% annualized) 
  11. 5/25 ... I had taken most of the risk off by closing out at  $61.   Chose to keep just  10%  of the position still in play for the earnings  report.  Stock surged  +7%  on Friday 5/26
  12. 5/25 ... Tuesday morning May 30th, I shall close out the position at the open at market price.  The stock has moved up from group 22 to 13 currently in the last 3 weeks.

Mentoring Service

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 How I Identify Winning Growth Stocks and How I manage the Stock to Outperform The Market

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Schedule a FREE 30 minutes of  "Discovery Call"   with us.   Learn how best we can coach you and mentor you to help you achieve outsize gains in the market.


Happy Trading!

Amin





Sunday, May 21, 2017

Why  I  Trade  Growth  Stocks

I started trading stocks and options on stocks in 1992.   I wasn't very successful at first but than I read the book:

"How  to  Make  Money  in  Stocks"


By William J. O'Neil  (Founder of Investor's Business Daily)

Once I started reading the book, I just couldn't put it down.   What struck me the most was a statement on the very first page of the book where it said:

"The American Association of Individual Investors conducted an independent real time study of 50 top investment strategies every month from January 1, 1998 to December 31, 2009 and found O'Neil's CAN SLIM to be the top performing investment strategy.

In AAII's study, CAN SLIM produced a  2,763%  result, an average of  35.3%  per year versus  3.3%  a year a year for the  S&P 500  during the same time period." 

This got my attention.   I quickly began to learn this system of trading  IBD (Investors Business Daily) types of Growth Stocks.   I learnt from all the IBD classes that I attended and the videos that I consistently watched on their website that an investor could out perform the general market by 2 to 2 and 1/2 times as measured by $SPY's performance as an indicator of the general market performance.  I just had to learn to buy the stock right and sell it right and not allow losses to be more than  -4%  to  -5%  from the purchase price if the market conditions worsened. 


Results  of  My  Test

On Monday April 24th, the 3 major indexex -  $DJI,  $SPY  and $QQQ  all gaped up and by the end of the day, IBD  changed the status of the condition of the market as  "Confirmed Uptrend"    That is the signal for retail investors to start deploying their profits by initiating a stock position.  

 I had identified 23 stocks on  My Watch List  that I posted on my blog on Sunday night April 23rd.   Here are the results of the performance of these stocks by establishing the base price of the stock as it was on the end of the market session on Monday April 24th.   I don't hold the stock through earnings and as such I looked at the price of stock on the end of the session prior to the day earnings were reported.   I just wanted to test out the theory that IBD style stocks do perform 2 to 2 and 1/2 times better than $SPY.

From the day the market was in  "Confirmed Uptrend"   until Friday May 19th,  major indexes performance was:

$DJX ... +0.19%
$SPY ... +0.48%
$QQQ ...+2.74% 

Performance of My 23 Stocks was  -1.76%  average for 7 losers
  1. $CIM ...   -0.20%
  2. $CRUS ... -0.60%
  3. $SWKS ... -0.90%
  4. $GMS ...  -1.40%
  5. $DIS ...    -1.83%
  6. $IBP ...    -2.52%
  7. $GTN ...   -4.84%
+ 4.44% average for 16 winners
  1. $RAI ...  +0.11%
  2. $CGNX .. +0.92%
  3. $CHTR .. +1.11%
  4. $MKSI ... +1.71%
  5. $ADBE ... +2.66%
  6. $SNPS ... +2.83%
  7. $IDXX ...  +3.62%
  8. $AEIS ...  +3.75%
  9. $ATVI ...  +3.85%
  10. $LRCX ... +5.12%
  11. $ULTA ... +5.70%
  12. $AMAT ... +5.74%
  13. $HDB ...  +5.95%
  14. $PCLN ... +6.28%
  15. $APO ...   +8.41%
  16. $MOMO ..+13.34%
Average performance for all 23 stocks - counting 7 losers and 17 winners - was  +2.68%.   in 3 weeks.    That amounts to  +46.45%   annualized.   $SPY  performance in the same period amounts to  +8.32%   annualized.


Mentoring Service

Enroll in our mentoring program to learn how to out perform the general market and learn:

How I Identify Winning Stocks and How I manage the Stock for Entry, Exit and using appropriate Trailing Stops

Contact us at:

investorspotlight@gmail.com

Schedule a FREE 30 minutes of  "Discovery Call"  with us.   Learn how best we can coach you and mentor you to help you out perform the market.

Happy Trading!

Amin

  

Saturday, May 20, 2017

Retailers   Reporting   Earnings  This  Week

We are at the end of the earnings cycle with over   90%   of the   S&P   companies already exiting the earnings confessional booth.   We have retailers like    $AZO, $AAP, $TIF, $WSM, $DLTR, $ANF, $BBY, $BURL, $COST, $DECK, $SIG, $ULTA    and   $BIG   slotted to report earnings this week.   Most of these companies are US centric.   They have very little to no exposure to foreign markets so there isn't any currency risk.   These companies are US consumer oriented.   70%   of the US economy is driven by the consumer spending.   Retailers such as   $SHLD, $JCP, $M, $KSS, $JPN   are on the decline.   They have lost their market share to online company such as   $AMZN.    Just be prepared for a nasty surprise and be defensive this week.

Thursday   May 25th i  s the busiest day for some of the retailers that report earnings that day.   Chances are the institutions may not react favourably to the earnings.   This weekend would be a good time to look over your stock positions in    Consumer Discretionary Sector    and have trailing stops to protect profits in a stock, if you already have   +5%   or more profits in the stock. Retailers may drag down the entire sector so it is best to be prepared for it. We had a nasty    distribution day   in    $SPY, $DJI    on Wednesday   May 17th   where the indexes dropped below the   50 day simple moving average   in volume   twice   the daily average volume.    $QQQ    however did not drop down that far but just managed to stay above the    34 day exponential moving average.    Most of stocks that were highlighted on my Stock Watch List the   past 4 weeks   in my blog   (investorspotlight.blogspot.com)   with stood the carnage in the market and were trading above the   21 day exponential moving average.   That is sign of strength in a stock when the general market trades below the   50 day simple moving average.   I had posted on my tweeter   @spotlightamin   to let my followers and readers know to start being defensive and raise   CASH   by selling off the laggards and holding on to the winners with appropriate trailing stops.
I shall post my detailed    Market Outlook    and results of some of the stocks on   My Watch List.   Be on the look out for it over the weekend.
Happy Trading.
Amin

Sunday, May 14, 2017

Double Your Portfolio - One Stock at a Time


Every Sunday night, I write a post for my followers and I share   "My Market Outlook"   for the week.   I also share   "My Stock Watch List"   every week.   It is never meant to be a recommendation.   Some of my followers have been asking me as to what should be the minimum number of stocks that they ought to have in their portfolio.   My simplest answer is   "As many as you can remember"    Most financial advisors tell their clients that they should diversify their portfolio to lower risk.   My approach is contrary to conventional thinking.   As a Retail trader and an investor, you should instead concentrate your portfolio with just a few stocks.   Your risk is smaller because your exposure in the market is in just a few stocks.   It also means that you should know everything about that stock and learn all the nuances and the behaviour of that stock.   Before you take the position in the stock, make sure you have a trade plan in place for your profit, loss and time in the trade target.

In my post this week, I will share with you just one typical trade in a stock and how I managed the trade to have an  +85%  annualized return.   Choosing the right growth stock is the easy part.   Constructing an appropriate Trade Plan and managing the risk in the trade is what will enable you to double your portfolio with just a few stocks in your portfolio.   You are focusing your attention on just a few stocks instead of getting overwhelmed with 10 or more stocks that are not the leading stocks in the leading sector.   

$IDXX  +14.79%  Return in 9 Weeks (+85% annualized)


Since January of this year,  $QQQ has been the leading index with a return of  +17%   year to date  (+40.75% annualized)   You would double your portfolio in two years by passively investing in this leading index.   I have been highlighting in my post that the leading sector is  $XLK(Technology)  and I had mentioned this stock a couple of times as being one of the stocks on My Watch List.   Here are some of the steps I took to manage the trade by adjusting my trade plan along the way to gain  +50%  more returns than the  +10%   profit that I had originally planned for when I took the trade.     

  1. Stock popped +16%  during earnings on Feb 2nd in volume that was 4 times the normal average daily volume.   This confirmed that institutions were supporting this stock.  The stock had acted in a very similar manner during earning on Aug 8th of 2016.   It took 3 weeks of tight trade with the stock hovering around 140 to 142 to digest the gains from earnings.
  2. Trade Plan: Entry at  $140  for  10%  profit Exit at  $156.20  and loss exit for  -4%  at  $136.32
  3. Stock was trading along the  8 day ema(exponential moving average) and its RS rating was in the high 90's and RS line was pointing up in a very bullish manner.   We had a distribution day on March 21st but the stock did not get any jitters and continued to trend along the  8 day ema while the  $QQQ  dropped down below the 21 day ema to touch the 34 day ema.   
  4. March 31st had a trailing stop at  $150  to protect the profits in the trade while the stock continued to track along the 8 day ema.
  5. April 20 had a trailing stop at  $152  to protect the profits in the trade while the stock continued to track higher along the 8 day ema.
  6. April 27 closed out the trade at  $163  to avoid risking profits in the trade with earnings report due the next day.
  7. Original Trade Plan was for  +10%  profit target and I managed to squeeze out  +4.79%  more by staying in the trade 3 more weeks since the stock was behaving in a bullish manner along with the market being in a confirmed uptrend.
  8. On Monday morning May 15th will reinitiate a trade since the stock is continuing to trend along the 8 day ema and RS ratings is still in the 90's and RS line is still pointing up.
Trade Plan: Entry $163 to $163.50 for  +10%  profit target and a loss of  -4%   I fully expect the stock to retrace and that is why I have planned for a loss exit.   $QQQ  is still the leading index and the leading sector is still the  $XLK(Technology)  that has done  +6.09%  in the last 4 weeks.


Mentoring Service

Enroll in our mentoring program and learn:

How I Identify Winning Stocks and How I Manage the Stock for Entry, Exit and using appropriate Trailing Stops

Contact us at:

investorspotlight@gmail.com.

Schedule a FREE 30 minutes of  "Discovery Call"  with us.   learn how best we can coach and mentor you to help you out perform the market.

Happy Trading!

Amin

Sunday, May 7, 2017


DOW  At  60,000  By  2025

How is that possible?   Most of you think this is too far fetched.   Actually it is not.   In 1995, the Dow was at 4,000 and within 5 years it reached 12,000.   Your portfolio would have tripled in those 5 years.   In March of 2009 the Dow was at 7,608 and it has almost tripled in the last 8 years to 21,006 as of Friday May 5th.   We had a bullish period in the market from 1995 to 2000 where the Dow tripled from 4,000 to 12,000 within 5 years.   History does repeat and this sort of performance in the market is not uncommon.   If you are a Growth Stock investor and you master the    IBD (Investors Business Daily)    rules of trading and investing, you can double or triple your portfolio during one of these bullish cycle in the market.   You just have to learn to   "TIME"   the market.    You have to be a  100%  in the market when the   "Market is in a Confirmed Uptrend"    as it was on Monday April 24th end of session that day.   There are also times when you have to be a   100%   in "CASH"    when the   "Market is in Correction"   as it was on February 8th of 2016.



My  Market  Outlook

Currently my outlook is still bullish.  In the last 3 weeks, the major indexes that I monitor have shown the following performance:

$DJI  ...   +5.66%
$SPY   ... +6.42%
$QQQ  ... +15.06% 

Leading sectors are the  $XLK(Technology) at  +12.67%   and   $XLY(Consumer Discretionary) at   +10.12%   in the last 3 weeks.   That is where we as retail traders and investors should focus our attention.   Market has been consolidating for the past 2 weeks but   $QQQ   still has the momentum.   I have the following stocks that have an upward pointing  RS line  and  RS ratings   above  90.   This shows that these stocks are poised to move higher once the market gets a catalyst.   French elections are over and more than 75%  of the companies in  S&P 500  have reported their earnings.    There is some certainly in the market now.


  1. $PRI
  2. $WDC
  3. $RCL
  4. $TER
  5. $DY
  6. $WB
  7. $AEIS
  8. $NFLX
  9. $AMZN
  10. $TEAM
  11. $DXJ (Japan etf)
  12. $EWJ(Japan etf)

Performance of Stocks on My Watch List Last Week

  1. $TMUS   -1.16%
  2. $BSX     +0.49%
  3. $WYN    +0.80%
  4. $AMZN  +0.99%
  5. $CCL     +2.02%
  6. $MCD    +3.28%
All of these stocks are still trending along the 8 day   ema(exponential moving average)  They are from the 2 leading sectors that I highlighted in this post.

Mentoring Service

Enroll in our mentoring program and learn:

How I Identify Winning Stocks and How I Time the Market for Entry and Exit

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Schedule a FREE 30 minutes of   "Discovery Call"   with us.
Learn how best we can coach and mentor you to help you out perform the market.

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.