5/27/2015

Anticipation setups for May 27, 2015




SSNI
NLS
ELLI
TBI
WWAV

These 5 stocks are on my anticipation list currently. While I am looking at them as bullish anticipation setups , they can also break down. 

5/26/2015

Finding the strongest and weakest stocks

Strength in a stock is timeframe defined. A strong stock for a given time frame shows momentum. Swing traders focus on stocks with momentum or stocks likely to soon have momentum.

For a day trader a stock that is up or down  for the day and continues to go up or down is a strong stock. A stock which starts its move at one end and end near high for the day is strong stock. Within that move if it makes big % gain of say 10 to 20% for the day it is good strong candidate for day traders.

For swing traders a stock that shows 3 to 10 days strength is good candidate as it allows them to capture part of the move. A stock that goes up 25% in a month is good swing candidate provided one can identify such stock say in first one third of the move or in other word if we can figure out a stock up 8% in a week is likely to go up 25% in next 3 weeks.

For longer term trading involving hold periods of months to years strength might be defined differently. A strong stock on that timeframe is one that continues to go up without much retracement . Strength on longer term moves has two components one part has to do with momentum or rate of change. While another part of good longer term move is resiliency. Resilient stock sustain there move for extended period of time.

SWKS is an example of one such strong and resilient stock.



It is one of the handful of stocks that has been going up for over 2 years with very little retracement. Stocks like these are good candidates for longer term trading . Identifying such stocks can help you pyramid in to them. They exhibit certain characteristics during their up move and if you know what those are you can try and identify and scan for such stocks. 

WLT is an example of very weak stock. It has been in downtrend for 4 years. From a high above 100 it has been cut down to few cents now. And during this move it has had sustained downtrend .



If you want to find stocks for position trading look for stocks like SWKS or WLT. If you can regularly find stocks like this or scan for them you will have an edge on longer time frame.

5/21/2015

How do stock move on 3 to 5 day time frame


Stocks move in momentum bursts of 3 to 5 days .

In 3 to 5 days they can go up 8 to 40%

Lower priced stock make bigger moves

Lower capitalisation stocks tend to make bigger moves

Low float stocks tend to make bigger moves

High short interest stocks tend to make bigger moves

What tells you a momentum burst is starting

A range expansion signals start of momentum burst

Range expansion in simple terms is a day that is bigger than previous 3 to 5 days move.

A range expansion preceded by non momentum burst (where stocks was not up 8 to 40% in last 2 to 3 days prior to it) is good candidate.

How can one find these kind of days

By using any kind of range expansion scan.

4% breakout is one of the ways to find range expansion.

Dollar breakout is another way to find range expansion on higher priced stocks that move in 5 to 50 dollar move but may not have 4% b/o on first day of momentum burst.

4% breakout scan which I use is a momentum burst scan

c/c1>=1.04 and v>v1 and v>=100000
Gives you stock up 4% plus
that also has volume surge compared to volume a day ago.
and has volume above 100000
The scan throws a wide net . Just because stock is in 4% b/o it is not automatic buy.
Once a candidate shows up you need to study the context of the setup and only select setup which indicate start of a momentum burst.

What to look for in a good momentum burst candidate

Based on our understanding stocks move in momentum burst of 3 to 5 days
one has to create certain guidelines for selecting candidate from 4% b/o or $ scan
First condition I look for is stocks should not be up 3 days in a row
Why
Because if stock is up 3 days in a row it has already started its momentum burst and entering it now is not a low risk entry.
Second thing I look for is stock should have narrow range day or negative day prior to breakout day
Why
Because that tells you stock was not in range expansion mode prior to breakout
Next thing I look for is relative smoothness of prior move.
Why
This is personal preference based on my study pf stocks that make longer term up moves. they tend to trade smoothly , have orderly pullbacks or consolidation and do not have too many shakeout moves. the prior b/o on them have worked
Why
Because given a choice I like stock that behaves in orderly manner. That reduces risk and marginally improves probability of success
Next I look for is young trend. A trend that is only beginning and is not severely extended . As far as possible first and second breakouts once a trend gets established are better. As trend gets extended probability of breakout failure increases.
Why this condition
Again to marginally improve the success rate.
These are some guidelines . If you use them 95% or more of 4% b/o gets eliminated.

Example of candidate I bought yesterday using the 4% breakout scan and above guidelines is FLY.


5/19/2015

Anticipation Setups for June 19, 2015.









Bullish Anticipation Setups
BLDR
HZNP
MLM
LYB
AMZN
NSP

Bearish Anticipation Setups
JEC
WHR
CTRL


5/15/2015

Anticipation Setups for May 15, 2015


Market had a big bounce back from bottom of the range. Many such bounces have been 2 day wonders. Let us see if we get more and convincing follow through.

Many stocks have held up well during this sideways range and they are near buy point. Little bit of buying can trigger breakouts in them.


Anticipation Setups

Bullish Anticipation

NSP
AMZN
TBI
SWHC
GLNG
TRQ
RTI
SUPN
GLUU
HZNP
ADPT
BLDR

Bearish Anticipation

SSYS
EMES
CENX
CTRL
TSU
YRCW
ACHN
GMCR
PCRX
ADTN
CALX
WHR
JEC

5/14/2015

Anticipation Setups for May 14, 2015

Market continues to trade in tight range. However it is dual natured with many stock breaking down while some holding well and some making 3 to 5 days moves.

Some Chinese stocks are acting well. Not many good momentum burst trades currently. CMCM was good one recently.



Bullish Anticipation Setups

BLDR

ADPT

GLUU

RTI

SUPN

GLNG

SWHC

TBI

AMZN

NSP



Bearish Anticipation Setups
JEC

WHR

HSY

ADTN

CALX

GMCR

PCRX

ACHN

YRCW

CENX

CTRL

SSYS