As of 1 PM the following stocks were meeting the 4% plus breakout and 70 EPS plus ratings.
AEM,Agnico-Eagle Mines Ltd (Google Yahoo Earnings Chart)
AEY,Addvantage Tech Group (Google Yahoo Earnings Chart)
AGE,A.G. Edwards Inc (Google Yahoo Earnings Chart)
ARGN,Amerigon Inc (Google Yahoo Earnings Chart)
ASML,Asml Hldgs Nv Ny Reg Shs (Google Yahoo Earnings Chart)
BFAM,Bright Horizons Fam Solu (Google Yahoo Earnings Chart)
BHE,Benchmark Electronics (Google Yahoo Earnings Chart)
BKRS,Bakers Footwear Group Inc (Google Yahoo Earnings Chart)
BLK,Blackrock Incorporated (Google Yahoo Earnings Chart)
CIEN,Ciena Corporation (Google Yahoo Earnings Chart)
CNC,Centene Corp (Google Yahoo Earnings Chart)
FTK,Flotek Industries Inc (Google Yahoo Earnings Chart)
HEI,Heico Corp (Google Yahoo Earnings Chart)
HSOA,Home Solutions Of America (Google Yahoo Earnings Chart)
JCG,J Crew Group Inc (Google Yahoo Earnings Chart)
LAYN,Layne Christensen Co (Google Yahoo Earnings Chart)
LXU,Lsb Industries Inc (Google Yahoo Earnings Chart)
NVT,Navteq Corp (Google Yahoo Earnings Chart)
PJC,Piper Jaffray Companies (Google Yahoo Earnings Chart)
PNSN,Penson Worldwide Inc (Google Yahoo Earnings Chart)
RHT,Red Hat Inc (Google Yahoo Earnings Chart)
RJF,Raymond James Financial (Google Yahoo Earnings Chart)
RRST,RRsat Glo Comm Network Ltd Ord (Google Yahoo Earnings Chart)
RVBD,Riverbed Technologies Inc (Google Yahoo Earnings Chart)
SF,Stifel Financial Corp (Google Yahoo Earnings Chart)
SNP,China Petro & Chem Ads (Google Yahoo Earnings Chart)
SSRX,3Sbio Inc Ads (Google Yahoo Earnings Chart)
TKC,Turkcell Iletisim Hizmetleri ADS (Google Yahoo Earnings Chart)
TSRA,Tessera Technologies Inc (Google Yahoo Earnings Chart)
While many are having second or third breakouts , the one with low 65 days price growth are worth investing.
5/31/2007
Perma Bears and History
“in February 1948, the communist leader Klement Gottwald stepped out on the balcony of a Baroque palace in Prague to harangue hundreds of thousands of citizens massed in Old Town Square.
Gottwald was flanked by comrades with Clementis standing close to him. It was snowing and cold, and Gottwald was bareheaded. Bursting with solicitude, Clementis took off his fur hat and set it on Gottwald’s head.
The propaganda section made hundreds of thousands of copies of the photograph taken on the balcony where Gottwald, in a fur hat and surrounded by his comrades, spoke to the people. On that balcony the history of Communist Bohemia began. Every child knew that photograph, from seeing it on posters and in schoolbooks and museums.
Four years later Clementis was charged with treason and hanged. The propaganda section immediately made him vanish from history and , of course, from all photographs. Ever since, Gottwald has been alone on the balcony -. Where Clementis stood , there is only the bare palace wall. Nothing remains of Clementis but the fur hat on Gottswald head.”- The Book of Laughter and Forgetting by Milan Kundera
Since the 2002 bottom, the market has been rallying, interspersed with occasional corrections. One permanent feature of the advance has been the perma bears insisting on this 5 year rally being just a counter trend rally in larger bear market.Various hypothesis and arguments have been advanced by the bears at various stages of the move. All of them have proven wrong.
Now the great race to erase the history will start. Bears after bears will crawl out qualifying or subtly changing their past calls. Some will just air brush their past hypothesis and calls. Just watch the fun. After all at some stage after being wrong consistently for five years even the most ardent fans will start questioning the logic and threaten to quit.
Casting a wider net
Last night I talked about looking at the 4% plus universe to figure out market trends and sector trends. Now that the market open is out of the way lets look at it closely.
To track that, everyday I segragate the list further in to two groups from the total 139 stocks:
AAON,Aaon Inc (Google Yahoo Earnings Chart)
AG,Agco Corp (Google Yahoo Earnings Chart)
AZZ,Azz Inc (Google Yahoo Earnings Chart)
BCSI,Blue Coat Systems Inc (Google Yahoo Earnings Chart)
BIIB,Biogen Idec Inc (Google Yahoo Earnings Chart)
CDWC,Cdw Corp (Google Yahoo Earnings Chart)
CF,CF Industries Holdings Inc (Google Yahoo Earnings Chart)
CMGI,CMGI Inc (Google Yahoo Earnings Chart)
CNH,Cnh Global Nv (Google Yahoo Earnings Chart)
COH,Coach Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
CTCI,Ct Communications Inc (Google Yahoo Earnings Chart)
CTCM,CTC Media Inc (Google Yahoo Earnings Chart)
CWTR,Coldwater Creek Inc (Google Yahoo Earnings Chart)
DBRN,Dress Barn Inc (Google Yahoo Earnings Chart)
EON,E.On Ag Ads (Google Yahoo Earnings Chart)
ESEA,Euroseas Ltd (Google Yahoo Earnings Chart)
ESV,Ensco International Inc (Google Yahoo Earnings Chart)
FISV,Fiserv Inc (Google Yahoo Earnings Chart)
FSTR,L.B. Foster Co Cl A (Google Yahoo Earnings Chart)
GMKT,GMarket Inc (Google Yahoo Earnings Chart)
GOOG,Google (Google Yahoo Earnings Chart)
GRMN,Garmin Ltd (Google Yahoo Earnings Chart)
GTLS,Chart Industries Inc (Google Yahoo Earnings Chart)
HEI,Heico Corp (Google Yahoo Earnings Chart)
HP,Helmerich & Payne Inc (Google Yahoo Earnings Chart)
IMA,Inverness Medical Tchnlg (Google Yahoo Earnings Chart)
JADE,Lj Internat Inc (Google Yahoo Earnings Chart)
JOYG,Joy Global Inc (Google Yahoo Earnings Chart)
KOP,Koppers Holdings (Google Yahoo Earnings Chart)
LQDT,Liquidity Services (Google Yahoo Earnings Chart)
MALL,Pc Mall Inc (Google Yahoo Earnings Chart)
MEA,Metalico Inc (Google Yahoo Earnings Chart)
MKTX,Marketaxess Holdings (Google Yahoo Earnings Chart)
MOV,Movado Group Inc (Google Yahoo Earnings Chart)
NDAQ,Nasdaq Stock Market Inc (Google Yahoo Earnings Chart)
NILE,Blue Nile (Google Yahoo Earnings Chart)
NSIT,Insight Enterprises Inc (Google Yahoo Earnings Chart)
NVT,Navteq Corp (Google Yahoo Earnings Chart)
PDA,Perdigao Sa Ads (Google Yahoo Earnings Chart)
PLD,Prologis (Google Yahoo Earnings Chart)
POT,Potash Cp Saskatchewan (Google Yahoo Earnings Chart)
PRAA,Portfolio Recovery Assoc (Google Yahoo Earnings Chart)
PVH,Phillips-Van Heusen Corp (Google Yahoo Earnings Chart)
SUG,Southern Union Co (Google Yahoo Earnings Chart)
SWSI,Superior Well Services Inc (Google Yahoo Earnings Chart)
TRCR,Transcend Services Inc (Google Yahoo Earnings Chart)
URBN,Urban Outfitters Inc (Google Yahoo Earnings Chart)
VSNT,Versant Corporation (Google Yahoo Earnings Chart)
WFR,Memc Electronic Material (Google Yahoo Earnings Chart)
Now why should one look at this 70 EPS plus EPS list. EPS and all other things which are important in IBD CANSLIM methods like margin, recent quarter earnings or sales trends, ROE, etc. are all reported at three month interval. So for a quarter that rating is static. What changes is sector ratings and relative strength. Relative strength is a derivative of price. So any change in price growth gets reflected in relative strength. So Relative Strength is dynamic variable in a quarter. If you focus on breakouts, you know if this breakout is successful at what price stage the relative strength ratings will change. So you can buy earlier.
For example look at COH, GOOG,and PVH the three stocks highlighted by IBD under "Stocks in the News", they were all part of the IBD 70 plus EPS breakout list. While IBD insists on buying based on certain chart patterns, in reality few stocks have those ideal chart patterns. Most time the ideal buy able breakout on such stocks is a 4% move much earlier before the IBD idal pattern forms.
The same logic applies to the price cut offs used by IBD, many times the lowest risk buyable breakout on stocks with high EPS will happen 1 or 2 dollars below the cut off.
Now out of the 50 again I use an Relative Strength of 65 plus to shortlist candidates and look at them in greater details. I have found buying on a 4% breakout on 70% plus EPS with 65 days weakness is a better option than waiting for the relative strength to build up to 80 and buying. If there is a breakout and price moves in the direction of breakout, Relative Strength ratings climb very fast.
The other thing you will notice is this approach helps you spot sector moves very early. If you noticed all the retail/ fashion related stocks had breakout yesterday. This is a very common phenomenon, some months ago all the shipping and fertilizers stocks broke out in span of 2-3 days. Most sector moves start with the stocks with better EPS ratings breaking out first followed by the weaker ones. So doing this day in and day out will keep you on top of the sector trends. Everyday I do this and generate around 2 pages of notes based on my analysis. One of these days I might post a complete analysis of 4% plus breakout list.
After I am done with the IBD 70 plus EPS list, I go through rest of the list to see why these stocks are moving. Many times stocks move in anticipation of better earnings. Such stocks you will find in this list. In many sectors like Biotechnology, Retail, and Technology especially, the stocks make a move in anticipation of better earnings. So looking at rest of the list is useful. Sometime sector starts moving ahead of earnings seasons and then good earnings come in. Similarly I look at the 4% plus breakdowns to see sector and individual stock trends.
So in essence casting a wider net gets you in to good EPS candidates much earlier. This method is more suitable for those with much deeper understanding of how stocks with good earnings move. The IBD 200 is a lazy way to do same thing for beginners.
The wider net approach gets you in to trends on high EPS stocks at the beginning of a major move. That way your risk is lower and you can pyramid all along the move.
- There were 132 4% breakouts yesterday
- If you add the Episodic Pivots to it, it was a total of 139 stocks.
- Double Trouble
- Episodic Pivots
- Virgin
- IBD 200
To track that, everyday I segragate the list further in to two groups from the total 139 stocks:
- Stocks with IBD 70 plus EPS
- Rest of the stocks
AAON,Aaon Inc (Google Yahoo Earnings Chart)
AG,Agco Corp (Google Yahoo Earnings Chart)
AZZ,Azz Inc (Google Yahoo Earnings Chart)
BCSI,Blue Coat Systems Inc (Google Yahoo Earnings Chart)
BIIB,Biogen Idec Inc (Google Yahoo Earnings Chart)
CDWC,Cdw Corp (Google Yahoo Earnings Chart)
CF,CF Industries Holdings Inc (Google Yahoo Earnings Chart)
CMGI,CMGI Inc (Google Yahoo Earnings Chart)
CNH,Cnh Global Nv (Google Yahoo Earnings Chart)
COH,Coach Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
CTCI,Ct Communications Inc (Google Yahoo Earnings Chart)
CTCM,CTC Media Inc (Google Yahoo Earnings Chart)
CWTR,Coldwater Creek Inc (Google Yahoo Earnings Chart)
DBRN,Dress Barn Inc (Google Yahoo Earnings Chart)
EON,E.On Ag Ads (Google Yahoo Earnings Chart)
ESEA,Euroseas Ltd (Google Yahoo Earnings Chart)
ESV,Ensco International Inc (Google Yahoo Earnings Chart)
FISV,Fiserv Inc (Google Yahoo Earnings Chart)
FSTR,L.B. Foster Co Cl A (Google Yahoo Earnings Chart)
GMKT,GMarket Inc (Google Yahoo Earnings Chart)
GOOG,Google (Google Yahoo Earnings Chart)
GRMN,Garmin Ltd (Google Yahoo Earnings Chart)
GTLS,Chart Industries Inc (Google Yahoo Earnings Chart)
HEI,Heico Corp (Google Yahoo Earnings Chart)
HP,Helmerich & Payne Inc (Google Yahoo Earnings Chart)
IMA,Inverness Medical Tchnlg (Google Yahoo Earnings Chart)
JADE,Lj Internat Inc (Google Yahoo Earnings Chart)
JOYG,Joy Global Inc (Google Yahoo Earnings Chart)
KOP,Koppers Holdings (Google Yahoo Earnings Chart)
LQDT,Liquidity Services (Google Yahoo Earnings Chart)
MALL,Pc Mall Inc (Google Yahoo Earnings Chart)
MEA,Metalico Inc (Google Yahoo Earnings Chart)
MKTX,Marketaxess Holdings (Google Yahoo Earnings Chart)
MOV,Movado Group Inc (Google Yahoo Earnings Chart)
NDAQ,Nasdaq Stock Market Inc (Google Yahoo Earnings Chart)
NILE,Blue Nile (Google Yahoo Earnings Chart)
NSIT,Insight Enterprises Inc (Google Yahoo Earnings Chart)
NVT,Navteq Corp (Google Yahoo Earnings Chart)
PDA,Perdigao Sa Ads (Google Yahoo Earnings Chart)
PLD,Prologis (Google Yahoo Earnings Chart)
POT,Potash Cp Saskatchewan (Google Yahoo Earnings Chart)
PRAA,Portfolio Recovery Assoc (Google Yahoo Earnings Chart)
PVH,Phillips-Van Heusen Corp (Google Yahoo Earnings Chart)
SUG,Southern Union Co (Google Yahoo Earnings Chart)
SWSI,Superior Well Services Inc (Google Yahoo Earnings Chart)
TRCR,Transcend Services Inc (Google Yahoo Earnings Chart)
URBN,Urban Outfitters Inc (Google Yahoo Earnings Chart)
VSNT,Versant Corporation (Google Yahoo Earnings Chart)
WFR,Memc Electronic Material (Google Yahoo Earnings Chart)
Now why should one look at this 70 EPS plus EPS list. EPS and all other things which are important in IBD CANSLIM methods like margin, recent quarter earnings or sales trends, ROE, etc. are all reported at three month interval. So for a quarter that rating is static. What changes is sector ratings and relative strength. Relative strength is a derivative of price. So any change in price growth gets reflected in relative strength. So Relative Strength is dynamic variable in a quarter. If you focus on breakouts, you know if this breakout is successful at what price stage the relative strength ratings will change. So you can buy earlier.
For example look at COH, GOOG,and PVH the three stocks highlighted by IBD under "Stocks in the News", they were all part of the IBD 70 plus EPS breakout list. While IBD insists on buying based on certain chart patterns, in reality few stocks have those ideal chart patterns. Most time the ideal buy able breakout on such stocks is a 4% move much earlier before the IBD idal pattern forms.
The same logic applies to the price cut offs used by IBD, many times the lowest risk buyable breakout on stocks with high EPS will happen 1 or 2 dollars below the cut off.
Now out of the 50 again I use an Relative Strength of 65 plus to shortlist candidates and look at them in greater details. I have found buying on a 4% breakout on 70% plus EPS with 65 days weakness is a better option than waiting for the relative strength to build up to 80 and buying. If there is a breakout and price moves in the direction of breakout, Relative Strength ratings climb very fast.
The other thing you will notice is this approach helps you spot sector moves very early. If you noticed all the retail/ fashion related stocks had breakout yesterday. This is a very common phenomenon, some months ago all the shipping and fertilizers stocks broke out in span of 2-3 days. Most sector moves start with the stocks with better EPS ratings breaking out first followed by the weaker ones. So doing this day in and day out will keep you on top of the sector trends. Everyday I do this and generate around 2 pages of notes based on my analysis. One of these days I might post a complete analysis of 4% plus breakout list.
After I am done with the IBD 70 plus EPS list, I go through rest of the list to see why these stocks are moving. Many times stocks move in anticipation of better earnings. Such stocks you will find in this list. In many sectors like Biotechnology, Retail, and Technology especially, the stocks make a move in anticipation of better earnings. So looking at rest of the list is useful. Sometime sector starts moving ahead of earnings seasons and then good earnings come in. Similarly I look at the 4% plus breakdowns to see sector and individual stock trends.
So in essence casting a wider net gets you in to good EPS candidates much earlier. This method is more suitable for those with much deeper understanding of how stocks with good earnings move. The IBD 200 is a lazy way to do same thing for beginners.
The wider net approach gets you in to trends on high EPS stocks at the beginning of a major move. That way your risk is lower and you can pyramid all along the move.
The bears and the dip buyers
- Market were down premarket Wednesday morning to news that the Shanghai Composite Index had shed 6.5%. The Chinese government is trying to avert a disaster. Weakness across Asia and Europe had the bears excited.
- But that action also excited dip buyers sending the market higher for the rest of the day.This was a classic bear squeeze. Month end also added a bit to that squeeze.
- A good thing about yesterday was number of stocks with good earnings lead the action higher.
- All the numbers , 65 days 25% plus, 100 and 200% plus and month 25 and 50% plus are in new high territories. So unless we see a major negative catalyst or 300 plus breakout on negative side, this rally has more time on its side.
- A new set of sectors have started a move up in last couple of days and that is getting reflected in the 4% breakout list clearly.
5/30/2007
Double Trouble
468 stocks up 100% plus is a new record for this rally. The Double Trouble system keep churning out opportunities. Today there are over 39 stocks in the universe. To reduce them to more manageable level you can look at the integrated Telechart breakout scan.
65 Days Weakness Plus Breakout
(100 * (C1 - C66) / C66) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
21 Days Weakness Plus Breakout
(100 * (C1 - C22) / C22) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
The rally has got second wind but in last couple of days breakouts have not had major follow through, so caution and tight stop is still the name of the game.
Once you become expert at identifying opportunities from this list, you can look at the total 4% breakout list. Today it has 132 stocks. Tomorrow morning I will post my methodology to sift through the 132 stocks in the list. Throwing a wider net can give you better understanding of the market and sector trends.
AG,Agco Corp (Google Yahoo Earnings Chart)
AZZ,Azz Inc (Google Yahoo Earnings Chart)
BCSI,Blue Coat Systems Inc (Google Yahoo Earnings Chart)
CF,CF Industries Holdings Inc (Google Yahoo Earnings Chart)
CHTR,Charter Communications Inc (Google Yahoo Earnings Chart)
CLF,Cleveland-Cliffs Inc (Google Yahoo Earnings Chart)
CMGI,CMGI Inc (Google Yahoo Earnings Chart)
CNH,Cnh Global Nv (Google Yahoo Earnings Chart)
CRM,Salesforce.com Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
CYTR,Cytrx Corporation (Google Yahoo Earnings Chart)
ESEA,Euroseas Ltd (Google Yahoo Earnings Chart)
EVOL,Evolving Systems Inc (Google Yahoo Earnings Chart)
FMT,Fremont General Corp (Google Yahoo Earnings Chart)
GTLS,Chart Industries Inc (Google Yahoo Earnings Chart)
GTXI,Gtx (Google Yahoo Earnings Chart)
JADE,Lj Internat Inc (Google Yahoo Earnings Chart)
KOSN,Kosan Biosciences Inc (Google Yahoo Earnings Chart)
LBIX,Leading Brands Inc (Google Yahoo Earnings Chart)
LBY,Libbey Inc (Google Yahoo Earnings Chart)
LNOP,Lanoptics Ltd (Google Yahoo Earnings Chart)
LQDT,Liquidity Services (Google Yahoo Earnings Chart)
MALL,Pc Mall Inc (Google Yahoo Earnings Chart)
MOS,Mosaic Company (Google Yahoo Earnings Chart)
MVIS,Microvision Inc (Google Yahoo Earnings Chart)
NFI,Novastar Financial Inc (Google Yahoo Earnings Chart)
NILE,Blue Nile (Google Yahoo Earnings Chart)
NOVC,Novacea Inc (Google Yahoo Earnings Chart)
NTL,Nortel Invesora Sa Ads (Google Yahoo Earnings Chart)
NYMX,Nymox Pharmaceutical Corp (Google Yahoo Earnings Chart)
PDA,Perdigao Sa Ads (Google Yahoo Earnings Chart)
POT,Potash Cp Saskatchewan (Google Yahoo Earnings Chart)
RZ,Raser Technologies Inc (Google Yahoo Earnings Chart)
SDA,Sadia S.A. (Google Yahoo Earnings Chart)
TRCR,Transcend Services Inc (Google Yahoo Earnings Chart)
TTG,Tutogen Medical Inc (Google Yahoo Earnings Chart)
VSNT,Versant Corporation (Google Yahoo Earnings Chart)
VSR,Versar Inc (Google Yahoo Earnings Chart)
XNPT,XenoPort Inc (Google Yahoo Earnings Chart)
65 Days Weakness Plus Breakout
(100 * (C1 - C66) / C66) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
21 Days Weakness Plus Breakout
(100 * (C1 - C22) / C22) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
The rally has got second wind but in last couple of days breakouts have not had major follow through, so caution and tight stop is still the name of the game.
Once you become expert at identifying opportunities from this list, you can look at the total 4% breakout list. Today it has 132 stocks. Tomorrow morning I will post my methodology to sift through the 132 stocks in the list. Throwing a wider net can give you better understanding of the market and sector trends.
AG,Agco Corp (Google Yahoo Earnings Chart)
AZZ,Azz Inc (Google Yahoo Earnings Chart)
BCSI,Blue Coat Systems Inc (Google Yahoo Earnings Chart)
CF,CF Industries Holdings Inc (Google Yahoo Earnings Chart)
CHTR,Charter Communications Inc (Google Yahoo Earnings Chart)
CLF,Cleveland-Cliffs Inc (Google Yahoo Earnings Chart)
CMGI,CMGI Inc (Google Yahoo Earnings Chart)
CNH,Cnh Global Nv (Google Yahoo Earnings Chart)
CRM,Salesforce.com Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
CYTR,Cytrx Corporation (Google Yahoo Earnings Chart)
ESEA,Euroseas Ltd (Google Yahoo Earnings Chart)
EVOL,Evolving Systems Inc (Google Yahoo Earnings Chart)
FMT,Fremont General Corp (Google Yahoo Earnings Chart)
GTLS,Chart Industries Inc (Google Yahoo Earnings Chart)
GTXI,Gtx (Google Yahoo Earnings Chart)
JADE,Lj Internat Inc (Google Yahoo Earnings Chart)
KOSN,Kosan Biosciences Inc (Google Yahoo Earnings Chart)
LBIX,Leading Brands Inc (Google Yahoo Earnings Chart)
LBY,Libbey Inc (Google Yahoo Earnings Chart)
LNOP,Lanoptics Ltd (Google Yahoo Earnings Chart)
LQDT,Liquidity Services (Google Yahoo Earnings Chart)
MALL,Pc Mall Inc (Google Yahoo Earnings Chart)
MOS,Mosaic Company (Google Yahoo Earnings Chart)
MVIS,Microvision Inc (Google Yahoo Earnings Chart)
NFI,Novastar Financial Inc (Google Yahoo Earnings Chart)
NILE,Blue Nile (Google Yahoo Earnings Chart)
NOVC,Novacea Inc (Google Yahoo Earnings Chart)
NTL,Nortel Invesora Sa Ads (Google Yahoo Earnings Chart)
NYMX,Nymox Pharmaceutical Corp (Google Yahoo Earnings Chart)
PDA,Perdigao Sa Ads (Google Yahoo Earnings Chart)
POT,Potash Cp Saskatchewan (Google Yahoo Earnings Chart)
RZ,Raser Technologies Inc (Google Yahoo Earnings Chart)
SDA,Sadia S.A. (Google Yahoo Earnings Chart)
TRCR,Transcend Services Inc (Google Yahoo Earnings Chart)
TTG,Tutogen Medical Inc (Google Yahoo Earnings Chart)
VSNT,Versant Corporation (Google Yahoo Earnings Chart)
VSR,Versar Inc (Google Yahoo Earnings Chart)
XNPT,XenoPort Inc (Google Yahoo Earnings Chart)
Market shrugs China
It is a very slow day. As of now only 66 stocks are up 4% plus and 27 down 4% or more. Market has formed small range in this area and it continues to churn. The dip buyers have been active pushing the tape around. As of now this looks still like a garden variety correction/consolidation with possible more upside.
Bloomberg had a big piece on how the short interest is at very high level. So squeeze may not be far off. Buying dips continues to work and it will take repeated failed attempts for the dip buyers to give up.
Bloomberg had a big piece on how the short interest is at very high level. So squeeze may not be far off. Buying dips continues to work and it will take repeated failed attempts for the dip buyers to give up.
IBD 200 Breakout Scan
Some of you are confused by the two step process and some have valid question about what if the stock meets the 65 days less than 10% growth condition mid way through week.
To simplify all these kind of concerns you can run an integrated Telechart breakout scan.
65 Days Weakness Plus Breakout
(100 * (C1 - C66) / C66) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
21 Days Weakness Plus Breakout
(100 * (C1 - C22) / C22) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
Running either of the scan daily will give you list of breakouts, which one can then shortlist further.
The basic philosophy behind looking for weakness in high relative strength stock is line with the fact that when trading breakouts, one should look for higher per trade returns. Also such entries allow for pyramiding.
Similar logic applies to the Double Trouble universe.
To simplify all these kind of concerns you can run an integrated Telechart breakout scan.
65 Days Weakness Plus Breakout
(100 * (C1 - C66) / C66) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
21 Days Weakness Plus Breakout
(100 * (C1 - C22) / C22) < 10 AND ( 100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
Running either of the scan daily will give you list of breakouts, which one can then shortlist further.
The basic philosophy behind looking for weakness in high relative strength stock is line with the fact that when trading breakouts, one should look for higher per trade returns. Also such entries allow for pyramiding.
Similar logic applies to the Double Trouble universe.
5/29/2007
Market Monitor
- Market character has changed with early strength being sold and dip buyers not in position to break above morning high.
- If you see the components of 4% plus breakouts, in last few days most are stocks at or near their 52 week lows. This often hints at trouble.
- The other possible sign of trouble is junk stocks below 5 are finding bids in large number in last couple of days.
- Month end effect should still keep a bid in market. But as pre mature bears learned today, shorting requires waiting for perfect spot. Lot of bears were excited when morning strength reversed but the dip buyers were active and the later half action looked like a bit of old fashioned panic covering by some shorts.
- Trading volume should start dropping as the weather becomes more tempting than the market.
Reducing the IBD 200 list
The IBD 200 list is essentially top 200 stocks ranked by IBD composite rating. If you look at the rating closely, it has higher weights to relative strength and sector relative strength. You will notice if a sector has high relative strength, even a 65 EPS rated stock will be in IBD 200.
The other thing to note is all the stocks on Thursday would be around 15% of their 52 week high or recent high in case of IPO. As a result in IBD 200 you get stocks which are in last stage of rally, some midway through and some stocks which are consolidating or correcting. The reduction method should find the third kinds.
65 Day price growth is one way to do that. It gives you a very few candidates to focus on. You can try 33 day price growth. It is more suitable to swing trading. Anything less than 20 days may not be very useful.
Also the patterns like cup with handle, pullback to 10 week MA line, double bottom at top of range, flat bases etc, which are popular patterns in IBD methodology, you will find them only in stocks with low 65 to 30 days price growth, not on overextended stock. Even if you find those patterns on overextended stock, chances of their failure is high on those stocks.
The number of opportunities you get is function of market phase. If you see the list after a 2-3 months market correction or more, you will get lots of opportunities. After 2to 6 months of rally , you will get few opportunities.If you consistently trade the IBD 200, then you would anyway would have bought the breakout on the overextended stocks on 65 days scan long time ago if at that time they were member of IBD200. Probability of that happening is high because you are constantly getting in IBD 200, top 4% stocks ranked by composite ratings.
The other thing to note is all the stocks on Thursday would be around 15% of their 52 week high or recent high in case of IPO. As a result in IBD 200 you get stocks which are in last stage of rally, some midway through and some stocks which are consolidating or correcting. The reduction method should find the third kinds.
65 Day price growth is one way to do that. It gives you a very few candidates to focus on. You can try 33 day price growth. It is more suitable to swing trading. Anything less than 20 days may not be very useful.
Also the patterns like cup with handle, pullback to 10 week MA line, double bottom at top of range, flat bases etc, which are popular patterns in IBD methodology, you will find them only in stocks with low 65 to 30 days price growth, not on overextended stock. Even if you find those patterns on overextended stock, chances of their failure is high on those stocks.
The number of opportunities you get is function of market phase. If you see the list after a 2-3 months market correction or more, you will get lots of opportunities. After 2to 6 months of rally , you will get few opportunities.If you consistently trade the IBD 200, then you would anyway would have bought the breakout on the overextended stocks on 65 days scan long time ago if at that time they were member of IBD200. Probability of that happening is high because you are constantly getting in IBD 200, top 4% stocks ranked by composite ratings.
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