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.


Happy to be Stuck with you said...

What is the formula for Double Trouble??

Pradeep Bonde said...

read the comments to see scan formula.