Get Rid of Your Christmas Merchandize 

I was working at JC Pennys as the Merchandizing Manager during my younger years and was very successful at selecting the right merchandize for the store.  Florida has tropical weather and swim wear is in great demand starting out in the month of March when tourists and college kids come for the spring break.  My initial shipment of swimwear has to land at the stores by middle of February.  Merchandize orders for swim wear have to be placed by early December.  Stores are packed full of christmas merchandize in mid December and my money is all tied up with toys and all the holiday trimmings, lights and christmas trees.  As a Merchandize Manager, I have to make sure there is enough $$$ available for new inventory purchase.  Unfortunately I had the store packed full of winter clothing as well as holiday merchandize.  I presented my dilema to my store manager.  I did not want to miss the opportunity of profiting from selling high mark up items of swim wear.  Without missing a beat, the store manager told me:

Mark down your christmas merchandize and get rid of it

I have adhered to this wisdom with my trading of Growth Stocks.  Getting rid of laggards from your portfolio is always a good decision.  Laggards tie up your capital that could possibly be used for a stock that is trending higher.  We had a  'Follow Thru'  day on March 11th but the market has not made much progress since that time.  If your recent buys in stocks are experiencing a loss of -6%,  it is a wise decision to dispose of it and look for something else instead.  Also if the stock has attained gains of +20% to +25%, harvest some of those profits and use that capital to invest in stocks that are making a progress during market correction.

Stocks  that  are  acting  well

Currently on a weekly chart, the  $SPY  has been staying above the 10 day sma(simple moving average) but the  $QQQ  is the weaker index and staying around the 21 day sma on a weekly chart.  It is sandwiched between the 10 day and the 21 day sma.  Market is definately rotating away from the technology stocks under current environment.  Looking over my stock watch list, I noticed that the semi conductor group, home furnishing group and some of the retail segments are doing very well.  Have a look at some of these stocks.  Most of them are extended but they could provide an opportunity if they retrace to their 10 week moving average or consolidate their gains in the next couple of weeks.  I have indicated the price in parenthesis from where the stock has made the recent progress.  Some of these stocks were mentioned as being on my stock watch list in Feb as well as this month in my blogs :

Stocks:

1. $AMAT   ... $117.82
2. $ASML   ... $608.71
3. $ENTG   ... $103.37
4. $ICHR    ... $ 47.85
5. $INTT     ... $ 10.35
6. $KLAC   ... $301.60
7. $LRCX   ... $560.70
8. $UCTT   ... $ 51.95
9. $AZO     ... $1297.82
10. $BBBY   ... $ 29.39 (Building position since follow thru)
11. $BBY     ... $116.02
12. $GNRC  ... $308.04 (Building position since follow thru)
13. $HOME   ... $28.44
14. $ORLY    ... $496.61
15. $RH        ... $524.22 (My largest position)
16. $SNBR   ... $133.61
17. $TGT      ... $194.22
18. $W          ... $342.99
19. $WSM     ... $151.16 (Gapped up with 8 week hold rule)

Good luck trading this week.  We are heading into our strongest month of the year on Thursday.  Have the capital available to trade new opportunities if the market continues to make the progress like it did on Thursday and Friday.

Happy Trading!

Amin

     

Market  Conditions

Market is still in a   'Confirmed Uptrend'   but it appears the Growth Stocks are not making much progress since the  'Follow Thru Day'  that was declared on March 11th.  Currently the leading Growth Stock index  $QQQ  is residing below the 50 day sma (simple moving average) and closer to the 100 day sma.  That does not bode well for the IBD (Investors Business Daily) style of investing.  We currently have 10   'Distribution Days'   between the  $NADAQ  and  the $SPY.  It's critical now to stop the bleeding and mitigate losses.  Personally I am cutting losses at  -5%  for new starter positions that were initiated during the  'Follow Thru Day'.  There was nothing wrong with the stock selection but the realities are, when the market goes through a corrective phase, 75% of the stocks will follow the general direction of the market.  Raising  CASH  should be the theme for this week and selling stocks into strength ought to be the primary goal of preserving the trading capital one has.

Stocks  to  Monitor

Lots of the market leaders we had last year and this year may not be the ones that will be the leaders again when the market decides to follow it's uptrend.  We have to start looking at the stocks with a fresh pair of eyes and monitor stocks that are residing above the 50 day sma.  Quite a few of the old market leaders are extended 10% or more beyond the rising 50 day sma.  If the market continues to retrace slightly and consolidate, some of these old leading stocks could form a tight base.  That would be ideal.  

Here is a list of stocks that are worth watching this week.  They are trading above the 34 day ema (exponential moving average) and showing institutional support.  I have indicated support/resistance price levels that I shall be monitoring.  Those levels will change however as the stock makes the progress.  

Stocks: 

1. $AMAT   ... $110.88
2. $APHA   ... $ 19.14
3. $ASML   ... $541.33
4. $APPS   ... $ 77.38
5. $BBBY   ... $ 30.08 (Have a position +5.79%))
6. $DKS     ... $ 78.39
7. $ENTG   ... $100.12
8. $ESI       ... $ 19.40
9. $ETSY    ... $211.85
10. $FANG    ... $ 74.60
11. $FRHC   ... $ 51.84
12. $GNRC   ... $293.00 (Have a position -3.90%)
13. $GOOGL ... $2035.00
14. $HI          ... $ 48.85
15. $IAC        ... $235.61
16. $INMD    ... $ 69.75
17. $KLAC    ... $287.34
18. $LGND   ... $154.95
19. $LRCX    ... $541.00
20. $MRVI     ... $178.19
21. $MU        ... $ 89.22
22. $PLT       ... $ 41.46
23. $SBUX   ... $104.86
24. $TDC      ... $ 42.18 (Have a position -0.94%)
25. $TGT      ... $181.11
26. $TLRY    ... $ 24.70 (Have a position +7.22%  Took 1/3 off for +31.80% gain)
27. $TWTR   ... $ 66.02
28. $WAL     ... $ 93.94
29. $YY       ... $115.28

Good luck with the market this week.  Lighten up with your stock positions this week and adhere to your rules for mitigating losses.  

Happy Trading!

Amin

 

Follow   Thru   Day

IBD declared a  "Follow Thru Day"  at the close of market on Thursday March 11th.  This clears the way for retail investors to start dipping their toes back in the market. 

Do You Have A Ready List Of Stocks To Initiate A Position?

Follow-Through Day Concept

System developed by William J. O'Neil to identify an important change in general market direction from a definite downtrend to a new uptrend.

A follow-through day occurs during a market correction when a major index closes significantly higher than the previous day, and in greater volume. It happens Day 4 or later of an attempted rally. Leading up to a follow-through day, an attempted rally takes place during a downtrend when a major index closes with a gain. The rally attempt continues intact as long as the index doesn't make a new low.

Follow-through day variables include: an index closing sufficiently above 1% on increased volume, positive behavior of leading stocks, and improved market action regarding support vs. resistance levels. The most powerful follow-through days often happen Day 4 through Day 7 of an attempted rally.

In the wake of a follow-through day, the market should continue to add gains in strong volume, with breakouts by top stocks. This is further confirmation a new uptrend is underway.

Above is an article found in IBD (Investors Business Daily) website:

Investors.com

In my blog post on Sunday March 7th, I had mentioned :

 "Quite often the market could rally strongly and we  could face a confirmed uptrend within 3 days sometimes"  

That is exactly what happened this time around.  Last 3 weeks were critical for retail traders.  Starting Feb 25th, we should have started scaling down our positions and raise  CASH.  It was also the time not to watch the broadcast media and get you all riled up.  Time would have been better spent instead looking over as many stock charts as possible to look for hidden opportunities.

This week was a critical week for Growth Stock investors and traders to stay very engaged with the market.  I listed over 50 stocks in the post this week that I was holding a watch over very closely.  There were 9 stocks that were clearly showing signs of accumulation by the institutions on Tuesday March 9th, the 2nd day of attempted rally.  They had increased in price by double digits.  Institutions were waiting for the market to open to grab every share they could lay their hands on.  These 9 stocks continued to make additional gains on Wednesday and Thursday.  

Here are the results of the performance of these 9 Growth Stocks on Tuesday March 9th (2nd day of attempted rally) with the gains in parenthesis indicating further gains on Thursday March 11th.

Stocks:

1. $ARKK ... +10.66% (+6.12%)
2. $APPS ... +15.36% (+14.62%) mentioned blog post 11/4/20
3. $DQ     ... +22.45%(+8.42%)
4. $ENPH ... +12.63% (+8.42%)
5. $FUTU  ... +24.16% (+9.81%)
6. $GME  ... +26.50% (-1.91%) should have sold into strength for more than 50% profit in 1 day
7. $NIO   ... +17.36% (+10.40%) mentioned blog post 11/4/20
8. $PLL   ... +21.87% (+8.11)
9. $QFIN  ... +20.27% (+16.88%)

Stock market correction is something all Growth Stock investors and traders ought to embrace.  It helps clear out the weak holders who don't quite know how to decipher institutional behaviour.  Once you learn and acquire the necessary skills of learning growth stock behaviour, you will learn to hold your emotions in check and let the data drive your decisions.

Good luck trading and acting on an opportunity that has presented itself to us.

Happy Trading!

Amin  

Follow   the   Institutions 

"I cannot do a superior research than these big boys.  But I can see what the big boys do with the research in the way they buy and sell stocks.  I see plainly on the index and individual stock's price and volume action.  That to me is all the information that is needed.  I just follow the big money.  But to get to that point, I spent years learning.  It is only the large gains I have made that has confirmed what all top speculators know.  It is all in the price and volume action.  And the rest of the stuff in the market is pure fluff" 

By Brad Koteshwar

Author of  'The Perfect Speculator'

John Boik @Monsterstocks1 tweeted the above passage earlier in the day on Tuesday March 9th.  You should follow him on tweeter.  He is a disciple like me of Mr William J. O'Neil (Founder of Investors Business Daily).  Quite often he highlights the work of 2 other greatest stock traders of our time - Mr. Jesse Livermore  and  Mr. Nicolas Darvas.

We had a strong follow thru action on Tuesday of  +3.86%  as a day 2 of the attempted rally on the leading growth stock index  $QQQ.  It bounced off the 100 day sma(simple moving average).  Currently the index is just  +3%  away from reaching the 50 day sma.  If we get a similar action tomorrow in greater volume than today, I would consider that to be a  'Follow Thru Day'  for me to test out some starter positions and allocate up to  2% of the capital initially to test them out.  I would also consider adding to some of my large existing positions that have survived the  -10%  correction since Feb 16th all time highs.

Here are some of the growth stocks that were on my short list that performed better than the  $QQQ  today.  It might be worth looking over the weekly charts of these stocks and identify earlier buy points to exercise.  Some of these stocks are extended while others are lying below the 34 day ema (exponential moving average).  You tend to have a higher probability of a successful entry if they are closer to the 34 day ema.  I have indicated the  %  price increase next to the stock symbol.  

Stocks:

1. $QQQ   ... +3.86%
2. $AMAT  ... +8.08%
3. $ARKK  ... +10.66%
4. $ASML  ... +7.38%
5. $ALGN  ... +3.99%
6. $APPS  ... +15.36%
7. $CHGG  ... +5.31%
8. $DBX     ... +4.13%
9. $DT       ... +6.18%
10. $DQ      ... +22.45% 
11. $ENPH ... +12.63%
12. $ENTG  ... +8.03%
13. $ESI      ... +8.32%
14. $ETSY   ... +8.30%
15. $FRHC  ... +6.89% 
16. $FTNT  ... +5.78%
17. $FUTU  ... +24.16%
18. $GBTC  ... +8.19%
19. $GME   ... +26.50%
20. $GNRC  ... +4.86%
21. $HOME  ... +6.88%
22. $HOV   ...  +4.69%
23. $HZO    ...  +5.60%
24. $IAC     ... +6.18%
25. $INMD   ... +6.41%
26. $IPGP   ... +6.09%
27. $KLAC   ... +7.32%
28. $LGND   ... +9.29%
29. $LI         ... +8.20%
30. $LOGI    ... +6.42%
31. $LRCX  ... +8.13%
32. $MPWR  ... +7.22%
33. $MRNA  ... +6.50%
34. $MU       ... +5.0%
35. $MXL     ... +4.79%
36. $NIO     ... +17.36%
37. $NVDA   ... +7.98%
38. $PINS    ... +7.96%
39. $PLL      ... +21.87%
40. $PLT      ... +7.65%
41. $PLTR   ... +7.90%
42. $PTC     ... ++7.32%
43. $PYPL   ... +6.82%
44. $QFIN   ... +20.27%

Do your homework first thing in the morning to identify the best of the best performing stocks.  All one needs is just a couple of stocks to attain gains of  +20%  to  +25%  within days or couple of weeks once IBD (Investors Business Daily) identifies a   'Follow Thru Day'.

U  Snooze  U  Lose

Stay disciplined and keep your standards very high.  Take action on stocks that exhibit an  RS  ratings that are in the 90's if ever possible.  Look for RS  line attaining all time high and pointing decidedly up between 12 and 3 o clock on the clock.  Look for decidedly increased volume above the normal during market rally days.  Next 2 days are pivotal if one wants to succeed as a retail growth stock trader and an investor.  There is no guarantee that the   'Follow thru Day'   would be successful but data suggests that one must take action and initiate a small starter position during such days.  April 2nd and April 6th 2020  'Follow Thru Days'  were suspects but history shows us that one would have doubled their portfolio with  $QQQ  in just 11 months since than.  We were all late coming to the party last year when IBD declared a   'Follow Thru Day'   in April.

Happy Trading!

Amin

Learn to  "TIME"  the Market

IBD (Investors Business Daily) declares a  'Follow Thru Day'  when the market attains a bottom and is attempting to rally.  That is the  TIMING  signal that Growth Stock Investors look for to slowly test out the market once again.  It could take anywhere from the 4th day to the 11th day of attempted rally before we could have a confirmed change in the direction of the market.  Quite often the market could rally strongly and we could face a confirmed uptrend within 3 days sometimes.  Friday we saw a very strong attempted rally with the Growth Stock index  $QQQ.  Volume traded was 3 times the normal average daily trading volume.  That indicated a strong conviction from the institutions in the market.  $QQQ   rallied  +1.50%  while the  $SPY  and  $DJI  both rallied even strongly by  +1.85%.

'Follow Thru' Day'    occur when we least expect it.  I can still remember when our nation was focused on fighting Iraq when Saddam Hussein had annexed Kuwait.  We had almost 1/2 a million troops in the Persian gulf and the media was hyper focused on analysis and the video coverage of the war.  We had the market rally and some of the leading Growth Stocks went on to make huge gains within weeks when IBD (Investors Business Daily) declared a  'Follow Thru'  day.  Retail investors that did their homework and deciphered the stock charts, ended up attaining substantial gains in the market. 

Hopefully you were not paying much attention to the media highlighting inflation, yield curve and sector rotation.  Your time would have been better spent raising  CASH  instead by harvesting profits from the stocks that had attained  +20%  to  +25%  profits.  Hopefully most retail traders learnt a painful lesson once again to scale down stock positions as the  $QQQ  heads down below the 21 day sma.  Last 3 weeks was the time to refine your Stock Watch List and just remain on the sidelines until the market shook out all the weak holders.  There is going to be  $1.9 Trillion stimulus money dispersed into the economy before the end of this month.  March and April are 2 of our most strongest months in the market.  

Could we be in for a very pleasant surprise once again with a powerful rally this week?

Do you have an action plan in place to take advantage of it?

Exactly a year ago when the nation and the rest of the world was getting locked down from Covid virus, we all thought that the world was coming to an end.  We were all scared and stunned while the market was dropping 1% per day for 35 days in a row.  Just as quickly we had a  "Follow Thru Day"  declared on April 2nd with the  $SPY  followed by the  $QQQ  just days later on April 6th.  Like most retail traders, it was even hard for me to engage with the market at that time.  $QQQ  was residing below the 50 day sma(simple moving average) and that was a suspect for me.  To our surprise the market just took off and never looked back.  2020 ended up being one of the best years in the market.  

Stock  Watch  List

In my post last week, I shared a list of 35 Growth Stocks that were leading the market.  This week I have refined the list after the powerful rally we experienced last Friday.  I am looking for just a handful of stocks to take a very small position when IBD declares a  'Follow Thru Day'.  The list is of stocks that have an  RS  ratings of 90 or above, the  RS  line is attaining an all time high or pointing in an upward direction.  Most of these stocks are trading above the 34 day ema(exponential moving average).  They have withstood the market correction.  That's an indication that institutions would prefer to hold onto these stocks.  They are certainly stretched beyond the 50 day sma.  I have indicated price in parenthesis to be support/resistance area or the price I would prefer the stock to retrace to. 

Stocks:

1. $ATKR ... (67.75)
2. $BBBY ... (27.50)  
3. $DE     ...  (335.21)
4. $DT     ...  (49.13)
5. $FUTU ... (132.95)
6. $GBTC ... (42.85)
7. $GM     ... (52.26)
8. $GOOGL ... (2050 - 2095)
9. $GNRC ... (287.55)
10. $HI      ...   (46.96)
11. $HOME ... (23.89) 
12. $IDXX  ...  (490.00)
13. $INMD ...  (65.39)
14. $IR     ...   (47.78)
15. $LOB   ... (51.65)
16. $LYFT ...  (57.68)  
17. $LOVE ... (52.36)
18. $MHK   ... (178.19)
19. $OMF   ... (51.23)
20. $PII     ...  (121.35)
21. $QFIN ...  (18.38)
22. $RIOT   ... (32.25)
23. $SONO ... (34.65)
24. $SYNA ... (127.16)
25. $TDC    ... (39.83)
26. $TGH    ... (24.34)
27. $TWTR ... (66.02)
28. $UCTT ... (44.39)
29. $WAL   ... (91.88)
30. $WSM  ... (121.60)

Stay very engaged with the market this week.  Continue to review all stocks on your watch list and remove the ones that falter.  Add the ones that continue to maintain their momentum and trade above the 34 day ema.  All you need is just a handful of stocks to start dipping your toes back in the market when the market resumes it's uptrend.  

Good luck this coming week.

Happy Trading!

Amin