Investor Spotlight

$ABMD Trade Made +9.29% in 3 days

Last Sunday night Feb 11th, I had identified 18 stocks that were on 'My Watch List' and I shared them in my blog post. I was preparing my readers to be vigilant and here is the quote from that post just before I listed stocks on 'My Watch List' :

"The market has made a very violent downtrend moves in the last 2 weeks and it could just as well make a a very similar counter trend move to reclaim the highs we made 2 weeks ago. This is the critical week to build up an actionable Stock Watch List."

I had listed a Trade on $ABMD that was filled on Wednesday Feb 14th at an early buy point of $245 for a gain of + 9.29% within 3 days. One could have the trade filled also the very next day on Thursday Feb 15th at its buy point of $255.42 as identified in the Trade Plan for a +4.82% gain within 2 days. This would have been a follow up second position to initiate on the stock since we got the confirmation of a 'Follow Thru' day that day.

Successful and profitable traders follow a routine of building a stock 'Watch List' every week. The market did make a violent bullish move just as it did during the 'Follow Thru' day in Feb 2016, June 2016 and Nov 2016. This is why as a trader and an investor, you want to have your decisions based on data and disregard your emotions about how you feel about the market. Chances are, you were feeling pretty lousy and gloomy when the 3 major major indexes - $SPY, $QQQ and $DJI - had dropped over 10% and were all trading below the 50 day sma(simple moving average). Wednesday Feb 14th (valentines day), the market gave plenty of signals very early by 10 am when there was an above average volume trading on $ABMD. We already had 3 days of market rally. 'Follow Thru' days often appear anywhere from the 4th day thru the 10th day. Taking a small initial position to test the market is what traders should do on a 'Follow Thru' day. Most stocks break out on such days and it makes sense to start out several small positions on stocks. Once there is a confirmation of the rally with increasing price of the indexes in above average daily volume, you can start getting rid of your laggards and use that money to scale into the one that is a true leader.

Leaders and Laggards

As a retail investor and a trader, you want to outperform the market. If you are a growth stock investor, you must measure your performance against the leading index. Here is what the 3 indexes did from its lows attained 6 sessions ago:

$DJI ... + 5.70%
$SPY ... + 6.00%
$QQQ ... + 7.50% (Leading Index)

I analyzed the 18 stocks that were on my 'Watch List' to isolate the Leaders and the Laggards. If you had purchased these stocks at the market open price on Monday Feb 12th, it is showing the following profits on those stocks:

Leaders:

$ABMD ... +15.33%
$NFLX ... + 9.91%
$IBKR ... + 7.57%
$ADBE ... + 6.65%
$NOC ... + 6.40%
$CMA ... + 6.11%

Laggards:

$BA ... + 5.49%
$EW ... + 5.49%
$ABBV ... + 5.36%
$MA ... + 5.31%
$NOW ... + 4.80%
$AMZN ... + 4.51%
$TSS ... + 3.69%
$EBAY ... + 3.31%
$CME ... + 3.21%
$ANET ... + 2.30%
$AMTD ... + 2.12%
$LPLA ... + 1.77%

Laggards are profitable but they are under performing the the 3 indexes and ought to be closed out and use the money to buy more shares of the leaders. That is how you consistently out perform the market.

Mentoring Program

Were you stunned when the market corrected over - 10% 6 days ago? It took 3 weeks in January to make an unprecedented gains only to give it all back and some within 6 days. Do you know what preventive actions you should have taken 3 weeks ago to mitigate losses to your portfolio? If you are feeling sick to your stomach with the train wreck we faced, than you need to make a commitment NOW to learn:

How to TIME the Market?
How to find the Winning Growth Stocks?
How to Buy the Stocks Right?
How to Plan your Trade for Profit, Loss and Time in the trade?
How to Sell your Stock Right?

I shall be opening up a very limited number of slots for mentoring in February. Schedule a FREE 30 minutes of "Discovery Call" with us and see how best we can help you become a consistent and a profitable trader and an investor in 2018. Don't procrastinate and pass up the opportunity of making a difference in your portfolio. Start out the new year with a resolution to invest in your education.