Bounce lacked volume

After days of inaction the 50% plus in a month indicator jumped to 12. Periods between 10 to 20 are high momentum zone, great for profitability. So discipline means putting back more positions.
There was no shortage of opportunities today. There were over 42 breakout in Double Trouble universe with many stocks breaking out of ranges.

Market Monitor

Total 4% plus bullish breakouts=164
Total 4% plus bearish breakouts= 41
65 day bullish/bearish ratio= 938/269
Stocks up 50% or more in a month=12
Stocks up 25% or more in a month=115
Number of stocks with 100% plus move = 385
Number of stocks up 200% or more = 87
4% plus signals for 100plus universe=42
4% plus signals for 200plus universe=10

Selected breakouts

ACOR,Acorda Therapeutics Inc (Google  Yahoo  Earnings  Chart)
AKRX,Akorn Inc (Google  Yahoo  Earnings  Chart)
AMAG,Advanced Magnetics Inc (Google  Yahoo  Earnings  Chart)
ARRY,Array Biopharma Inc (Google  Yahoo  Earnings  Chart)
BSQR,bSquare Corp (Google  Yahoo  Earnings  Chart)
CBEY,CBeyond Communications Inc (Google  Yahoo  Earnings  Chart)
CCOI,Cogent Communications Group Inc (Google  Yahoo  Earnings  Chart)
CPA,Copa Holdings S.A. (Google  Yahoo  Earnings  Chart)
EXM,Excel Maritime Carriers (Google  Yahoo  Earnings  Chart)
FTK,Flotek Industries Inc (Google  Yahoo  Earnings  Chart)
GTXI,Gtx (Google  Yahoo  Earnings  Chart)
IIG,Imergent Inc (Google  Yahoo  Earnings  Chart)
INCY,Incyte Corp (Google  Yahoo  Earnings  Chart)
JAV,Javelin Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart)
JSDA,Jones Soda Co (Google  Yahoo  Earnings  Chart)
LFC,China Life Insurance Company (Google  Yahoo  Earnings  Chart)
LXU,Lsb Industries Inc (Google  Yahoo  Earnings  Chart)
NXST,Nexstar Broadcasting Group (Google  Yahoo  Earnings  Chart)
ONXX,Onyx Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart)
PERY,Perry Ellis Int'l (Google  Yahoo  Earnings  Chart)
RNIN,Wireless Ronin Technologies Inc (Google  Yahoo  Earnings  Chart)
RZ,Raser Technologies Inc (Google  Yahoo  Earnings  Chart)
SIGA,Siga Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart)
SPIL,Siliconware Precision Industries Company Ltd ADS (Google  Yahoo  Earnings  Chart)
SPPI,Spectrum Pharm Inc (Google  Yahoo  Earnings  Chart)
SWHC,Smith & Wesson Hldg Corp (Google  Yahoo  Earnings  Chart)
TLEO,Taleo Corp (Google  Yahoo  Earnings  Chart)
VHI,Valhi Inc (Google  Yahoo  Earnings  Chart)
VOLC,Volcano Corp (Google  Yahoo  Earnings  Chart)
VYYO,Vyyo Incorporated (Google  Yahoo  Earnings  Chart)

Possible long candidates based on 65 days price growth or being in top 20 in terms of overall 260 days growth or recently crossing 100% plus mark are ACOR, CCOI, GTXI, CPA, and TLEO.

ACOR is up 965% from its 260 days low. Stock like ACOR shows the value of buying the top 25, even if you get stopped out. This is my 5 th trade in this stock, one of it was not profitable. The stocks in the top 20 or 25 list just have super hot momentum, at some stage they will reverse, but till then buying breakouts with tight stop is most profitable. Provided you can psychologically do it. Not an easy task for most. Plus if you start believing in things like resistance and support, you are unlikely to buy breakouts on such stocks.

Trading a methodology like Double Trouble requires fortitude. You can lose 1% each on 10 consecutive trades and 11 th trade will give you 30 or 40% in few weeks. For many traders to trade something like that can be very unsettling.

The other critical thing is not to get emotionally involved on any of the stock. If you start looking at other variables like earnings or something else to make decision on this list, you might not get best results.The whole idea behind trading something like this is pure momentum and runaway trends. That is the reason I use momentum criteria like one year growth or 65 days growth to shortlist candidates in this list and not float or earnings.

Momentum trading works for bulk of the time, the trick is to avoid some dangerous periods.

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6 comments:

Unknown said...: Yesterday you had VOLC as a potentail long candidate, but today it has not made the cut. Does it mean it has been taken out of the list?; Apr 12, 2007, 8:44:00 PM
Pradeep Bonde said...: I entered VOLC yesterday. So the fresh signal is not meaningful.; Apr 12, 2007, 8:47:00 PM
Unknown said...: You also mention to ride the momentum and not to waste time looking for support/resistance etc. From that I assume, you are saying if a person wants to ride this momentum, then he should jump right on and put a tight stop. What would you condiser a proper stop to be for a stock like VOLC? I realize it can be based on portfolio size, risk appetite etc, but if one has to be specific for VOLC, what would be a guide line be?; Apr 12, 2007, 10:27:00 PM
Pradeep Bonde said...: All my stops are at two days low before entry day. In this case the low was 17.98 on 4/9,that is the stop , my entry was on 4/11,entry was at 18.53.The capital risked was slightly less than 1% of total equity.
VOLC is not a buy at this stage according to my scheme of things.; Apr 13, 2007, 4:23:00 AM
Anonymous said...: I looked over Nexstar Broadcasting Group Inc. (NXST) and think this one may continue to run. Thanks for the tip. I have included it in my Linear Stock blog at http://lnca.com; Apr 14, 2007, 9:58:00 AM
M.A.S said...: too much noise
,way cool site!
MAS; Apr 14, 2007, 8:30:00 PM

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