What makes a stock move 100% or more in a year | stockbee

2/04/2007

What makes a stock move 100% or more in a year

This is basically a open thread to stimulate some thinking.
What makes a stock make a 100% plus move in a year?
How much time does it take for a stock to make 100% move?
How many stocks make a 100% move in a year?
How many stocks make a 300% plus move in a year?
What chart patterns can help you find 100% plus movers?
If so many stocks make 100% plus moves in a year, why do so many investor fail to make 10% in a year.
Do you know how much a stock has moved in a year for the stock you trade.
What triggers a 100% plus move?
How many stocks made a 100% plus move in 2000 and 2001?
Why you will not trade this system?

Previous post in this series:
How to find a stock which makes 1500% move in a year

Update:
Here is the latest 100% plus list in spreadsheet.

5 comments:

Shiva said...

It usually starts with the first positive news about the company in a long time (earnings, new product release, fda approvals etc). This would usually be accompanied by a volume breakout (say the volume on the first breakout day is 100 times the monthly avg vol)
From that point onwards, the key is to ride the trend. The move could be real show but its important to make sure that no negative news comes out of the company. Remember we don't want buyers to keep buying. We just don't want a lot of sellers selling the stock !!!

How much time it takes really depends on a lot of aspects including the general market conditions. If a stock is part of a recent boom (like china boom or ethanol boom) then it goes up really fast.

Rearding the technical characteristics of these stocks, they tend to stay above the 50 day MA after the first breakout for the most part.
These stocks should be tracked from the day they make a major gap up with increased volume. I don't know what chart patterns to look for that can tell that a stock is going to move 100%+.

One reason that I can think of for people not trading this system is because, they just trade and don't invest. The timeframe for a trader could really be a couple of days or weeks. Holding these stocks in anticipation of a 100%+ move might violate the profit taking rule.
If your exit criteria is to sell for a 1R or 2R profit then you'll be out during the initial 10-20% run and you may not look back at this stock again !!

paulin said...

I think many of us who don't have a 1-2-3-4 bagger, might have most probably traded atleat a few of those during their run. The question is When to sell a stock? I would like to know what your thoughts are on 'When to sell a stock?', and may be 'Which are the stocks to hold, and which aren't'. Looking at few of these charts with a hindsight, the breakout seems so clear and may be a stop loss at 25 DMA would have giving you great returns. But the problem is when you have 15 stocks in your portfolio, I don't think you can apply this strategy. I would like to hear what strategies do you use to keep few stocks like this in your portfolio.

Pradeep Bonde said...

Shiva:
To summarise what you are saying
1 At the beginning of trend there is some catalyst and high volume breakout.
2 You are not sure about what chart pattern would find it
3 People trade with too short a time frame
Paulin
Questions for you
Would you have 100 positions in your portfolio if you know they have high probability of making 100% plus move or have 15 positions and make 20%

paulin said...

Pradeep, thats something I have thought about earlier. Especially following yours' and stockcoach's blog, I have seen and understood how and why this strategy of holding a large no. of stocks with potential to make 100% moves works. I haven't been able to execute it yet....my initial thought was it will take too much of my time as trading isn't my profession, but I guess I can do better....by taking a systematic approach and sticking to the plan. Your subsequent posts helps..Thanks for all these insightful posts..

Pradeep Bonde said...

Paulin
There are many ways to look at making this work was my point. To illustrate the point I made the rules very simple and easy, but if you want to trade something like this, just use this as a template to play around with the rules, you will get better results.