Investor Spotlight

Sunday, September 8, 2019

Stock Charts Are Maps

"I always check my charts and the moving averages prior to taking a position"
By Marty Schwartz (Wall street trader and winner of US investing championship in 1984)

Market conditions improved on Thursday Sept 5th when all the 3 major indexes - $DJI, $QQQ and $SPY gapped up at the open and bolted past the 50 day simple moving average in volume greater than the average daily volume. IBD (Investors Business Daily) updated the market pulse to "Market in Confirmed Uptrend". That's a signal to retail investors to start taking some positions or to add onto the positions that held up well from the last "Follow Thru" day we had on August 14th. Understanding the simple moving averages that I highlighted in my last 2 posts would help you decide which stocks to build on with a second position and at what price to initiate that position.

Simple moving average (sma) lines are like maps of what the stock is doing on any given day or the week. It exposes the intentions of the institutions with the stock. As a retail trader and an investor of Growth Stocks, we want to do exactly what the institutions are doing. They ultimately decide what the stock does because they account for more than 70% of the buying and selling of stocks in the market.

The 4 stocks that I had mentioned in my post - $SBUX, $PAYC, $MTH and $PCTY - are all hovering above the 10 day sma for the last 4 weeks. The 3 major indexes - $DJI, $SPY and $QQQ on the other hand have been bouncing up and down between the 50 day and the 200 day sma. These 4 stocks indicates support from the institutions since they all are showing strength of support by staying above the 10 day sma. Here are the resistance and support lines that I came up with before initiating a second position on these stocks. These lines were drawn utilizing the lines of the 10 day sma.

$SBUX ... $96.04 ($95.75 triggered at market open on Friday Sept 6)
$PAYC ... $246.85 (Open order as of Friday Sept 6)
$MTH ... $ 64.71 (Open order as of Friday Sept 6)
$PCTY ... $107.95 ($107.95 triggered during the trading day Friday Sept 6)

Mentoring Program

I shall be opening up a few slots in October in my Mentoring Program. Summer training slots were very quickly snapped up and these months provided lots of opportunities to profit in the market. We are heading into the 4th quarter which is a very busy and a profitable quarter traditionally. If you are serious about speeding up your learning curve than I shall open up a few slots in the coming months. It will be on a first come first served basis only. We have already attained +20% gain with the leading growth stock index $QQQ year to date. We could have an additional +10% gain in the next 4 months. Now is an ideal time to learn to trade and invest utilizing growth stock strategies of IBD(Investors Business Daily).

Schedule a FREE 30 minutes of "Discovery Call" with us and investigate how our program can help you learn the basics of reading the Stock Charts:

How to find the winning Growth Stocks?
How to Buy the Stocks Right?
How to Sell the stocks Right?
How to TIME the market?
How to protect and harvest your profits?