Market monitor is also about nature and size of opportunity | stockbee


Market monitor is also about nature and size of opportunity

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

To many these are just numbers. But if you think about it, these numbers clearly tell you about the nature of opportunity in the market place for a given time frame.

You can look at the same set of numbers as:

  • There were 385 opportunities in stocks that doubled in a 260 day time frame.
  • Even if you missed the first 100% , there were 87 opportunities in stocks which went on to gain anywhere from 200 to 977% in last 260 days.
  • On a quarterly time frame there were 938 opportunities in stocks with 25% plus gain. In the same 65 days 46 stocks had between 100 to 392% gain.
  • If shorting is what fascinates you , then there were 254 opportunities which made between 25% to 79% on short side.
  • If you are primarily a few days swing trader then you might want to see the extent of opportunity on the one month time frame.
  • 96 Stocks offered 25% plus opportunity in just 20 trading days. 10 of them offered 50% plus opportunity.

Once one understands the opportunity, one can look further to find, how can I identify and trade this opportunity. You can continuously study this opportunity to figure out questions like:

  • What triggers a 100% plus move in 260 days?
  • What was the price action on this stock before the 100% move?
  • Do stocks at top of range make 100% move or do stock at bottom of their 3 year range make 100% move?
  • Are there some episodes which trigger this move?
  • Does it make sense to buy breakout or weakness on such stocks?
  • What was the liquidity on such stock before breakout?
  • How does liquidity move over the progression of the move?
  • How do these move end?
  • Should you listen to perma bears

If you do this over a period of time or over an extended period of time, you become an expert in stocks which make 100% plus move in 260 days or less. That can be a very good edge to have in a market where people struggle to make 10%.

If we know the nature and extent of opportunity in market, we can better design strategies to exploit it. Better prioritize our efforts. And above all play in a different segment of the market. A segment of market where stocks make dramatic moves and on which most people are not consciously focused.


dachestmeister1 said...

found your blog wed eve and was fascinated by earnings and ibd , went out thurs and bought 1.25 way to beat market, how can i use this idb 200 in my scottrade ? would appreciate any comments here , i want to understand what your teaching so i will be here everyday till it sinks in , thanks for giving back ,mark

m said...

I recently found your blog and it looks great. As a newbie to the investment world...what steps do you think I should follow to start investing wisely. I already subscribe to IBD and watch some of the shows on CNBC. Thanks!

Tom said...

m - Two books you need to read: Trading for a Living by Alexander Elder and Trade your Way to Financial Freedom by Van K Tharp. They will give you the essentials of money/risk management and trading strategy. I am learning along with you here. I switched from CNBC to Bloomberg. Much better quality content. Although Fast Money is entertaining.

Bernard said...

Pradeep are your market monitor scans derived from using Telechart 2007 software?

Pradeep Bonde said...

Please go throgh old posts, this question has been answered many time. Detail step by step instructions are in several posts or in comments.

To invest wisely one needs to follow a method
See my earlier post "Methods trump markets..."

Most are done using TC2007, the 100% plus are done using my own software as calculating 100% growth for less than 260 days trading history in TC2007 is very cumbersome procedure.

m said...

Thanks for the Methods trumps market post. A few blogs back u stated u were going to go into a microscopic detail of studying this still coming? Thanks

Pradeep Bonde said...

I wrote about it long time back after that post.

Pradeep Bonde said...