Market Monitor | stockbee

6/19/2007

Market Monitor

  • Momentum persisted yesterday in select few stocks. As you can see the Double Trouble universe had 44 stocks up 4% or more.
  • As the move progresses chasing new breakouts become more risky. The best way to play a momentum stock in my book is to coincide your entry with weakness in overall market and a weakness or stalled price action in individual stock. That opportunity presented itself some days ago. If you bought stocks 5-7 days ago from Double Trouble or IBD 200 many have made 10% plus moves in few days while indices are churning at same level.
  • Both set of methods give you high beta stocks and as a result they tend to give you higher return. That is why trader like Barry can make 27% in few weeks by perfecting their method. To trade momentum, the small nuances are equally important.
  • We are back to levels where finding low risk breakout becomes difficult. Which means at some stage in next few days we will have a correction and the cycle continues. That is the way momentum in market works.
  • What has changed in last week that 50% of the participants of the blogger sentiment poll has changed bullish. This market move is pretty old by normal market standards. People who miss out a move and trader with no methodology, at some stage ( near the top or bottom), just cannot endure the pain of being wrong, they turn bullish or bearish very late in a rally. That is classic human psychology at work. Amateurs chose exactly the wrong time to be bullish or bearish, that is what creates profit opportunities for skilled speculators.

2 comments:

Jason said...

What is the formula for Double Trouble??

Pradeep Bonde said...

http://stockbee.blogspot.com/2007/02/how-to-find-stock-which-makes-1500-move.html
read the comments to see scan formula.