Investor Spotlight

Scaling in Stock Position

We have had 3 "Follow Thru" days this year. That is the day that market conditions signals a change to "Market in Confirmed Uptrend". It's a signal for investors to start taking initial small positions in stocks to test out the market. Not all "Follow Thru" days will materialize however. Its critical though not to procrastinate on this day. Institutions will start deploying their profits into leading stocks and these stocks would start making profits within a very short time. Once the stock starts making you profits and the market continues to maintain its uptrend, it is time to start adding to your positions.

Following is an example of how $ABMD was scaled into during the last 3 "Follow Thru" days we had this year. The strategy to follow with Growth Stocks is to "Buy High and Sell Higher". It may seem counter intuitive because most of us have been preached "Buy Low and Sell High". Actually you make a higher percentage of profits if you abide by the rules that I have highlighted in parenthesis. Profit is calculated per week with the closing price of $372.68 on Friday May 11th.

Follow Thru Days:

February 14th ... 50% position at $245.00 (+ 4.19% profit per week)
April 11th ... 30% position at $300.40 (+5.45% profit per week)
May 10th ... 20% position at $358.72 (+9.73% profit per week)

Market Performance

We had a lot of Growth Stocks breaking out since Friday May 4th. The 3 major indexes - $SPY, $QQQ and $DJI have finally broken above the 50 day sma. Their performance for the week was:

$DJI ... + 2.35% (3 days above the 50 day sma)
$SPY ... + 2.57% (3 days above the 50 day sma)
$QQQ ... + 2.78% (6 days above the 50 day sma)

$QQQ is still the leading index and Technology Sector is where one should be looking for opportunities. $XLE (Energy Sector) has broken out since April 11th "Follow Thru" day. It's + 9.76% since than. $CLR position that I mentioned in my post last week is +10.87% in the same time period. That is what you want to see. You want the leading stock in the leading sector to outperform the sector etf. $CLR did just that.

Scaling In + New stock Positions

The 5 winning stock positions that were mentioned in my blog post last week, were leading the market. They were trading along the 8 day ema (exponential moving average) while the "Market was Under Pressure". A follow up position was initiated at market open on May 10th. 2 new small positions were also initiated at market open on $ADBE and $MA. They had been trending along the 8 day ema for over 12 days while the 3 indexes - $SPY, $QQQ and $DJI were below the 50 day sma. Institutions were supporting these stocks and these are the kinds of stocks you want to buy on a "Follow Thru" day. Follow along with me on these trades to help you learn about scaling in position. Here are those stocks and their entry prices identified in parenthesis:

$ABMD ... $358.72 (3rd position)
$ADBE ... $240.46 (1st position)
$MA ... $184.60 (1st position)
$BR ... $114.73 (2nd position)
$CLR ... $ 68.46 (2nd position)
$CPRT ... $ 53.91 (2nd position)
$RHT ... $172.00 (2nd position)

Mentoring Program

Would you like to learn:

How I Out Perform the Market?
What Stocks to buy and when?
How to Time the market?

Make a commitment to take control of your portfolio and learn from me. Listening to the professional money managers and financial advisors is the very wrong thing to do. You have the unbiased data from the Barrons magazine of the lack of performance of the professional hedge funds. The top 100 hedge funds underperformed the general market in 2017 - as measured by the performance of $SPY by - 4.04%.

Schedule a FREE 30 minutes of "Discovery Call" with us and start your investment journey with me as your mentor and a coach. Don't procrastinate and pass up the opportunity of making a difference in your portfolio. Start out with a resolution to invest in your education.

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