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:
- $QQQ ... +3.86%
- $AMAT ... +8.08%
- $ARKK ... +10.66%
- $ASML ... +7.38%
- $ALGN ... +3.99%
- $APPS ... +15.36%
- $CHGG ... +5.31%
- $DBX ... +4.13%
- $DT ... +6.18%
- $DQ ... +22.45%
- $ENPH ... +12.63%
- $ENTG ... +8.03%
- $ESI ... +8.32%
- $ETSY ... +8.30%
- $FRHC ... +6.89%
- $FTNT ... +5.78%
- $FUTU ... +24.16%
- $GBTC ... +8.19%
- $GME ... +26.50%
- $GNRC ... +4.86%
- $HOME ... +6.88%
- $HOV ... +4.69%
- $HZO ... +5.60%
- $IAC ... +6.18%
- $INMD ... +6.41%
- $IPGP ... +6.09%
- $KLAC ... +7.32%
- $LGND ... +9.29%
- $LI ... +8.20%
- $LOGI ... +6.42%
- $LRCX ... +8.13%
- $MPWR ... +7.22%
- $MRNA ... +6.50%
- $MU ... +5.0%
- $MXL ... +4.79%
- $NIO ... +17.36%
- $NVDA ... +7.98%
- $PINS ... +7.96%
- $PLL ... +21.87%
- $PLT ... +7.65%
- $PLTR ... +7.90%
- $PTC ... ++7.32%
- $PYPL ... +6.82%
- $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
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