IBD 100 possible breakouts to buy

Now using the logic I talked about in my last post , lets look at the set of possible buyable breakouts based on yesterday's action.
On the IBD 100 list I applied a 2% breakout condition like this:
( 100 * (C - C1) / C1) >= 2 AND V >= 1000 AND V > V1
Which looks for a 2% move on higher volume and sets a minimum volume condition of 100000.

That gives me following stocks:

AMZN FMCN GLNG GRMN ISRG MTW NILE SNDA SSRX SYNA TBSI VDSI

AMZN,Amazon.Com Inc (Google Yahoo Earnings Chart)
FMCN,Focus Media Holding Ltd ADR (Google Yahoo Earnings Chart)
GLNG,Golar Lng Limited (Google Yahoo Earnings Chart)
GRMN,Garmin Ltd (Google Yahoo Earnings Chart)
ISRG,Intuitive Surgical Inc (Google Yahoo Earnings Chart)
MTW,Manitowoc Co Inc (Google Yahoo Earnings Chart)
NILE,Blue Nile (Google Yahoo Earnings Chart)
SNDA,Shanda Interactive Ent Ltd (Google Yahoo Earnings Chart)
SSRX,3Sbio Inc Ads (Google Yahoo Earnings Chart)
SYNA,Synaptics Inc (Google Yahoo Earnings Chart)
TBSI,TBS International Limited Class A (Google Yahoo Earnings Chart)
VDSI,Vasco Data Security Intl (Google Yahoo Earnings Chart)

Now to narrow down the stock to buy, out of these are two possible filters I can use:

One month growth less than 10% :
(100 * (C1 - C22) / C22)<=10 Or 10 days growth less than 10% (100 * (C1 - C11) / C11)<=10 Using these two filters we get: AMZN FMCN GLNG GRMN ISRG MTW NILE SNDA SSRX SYNA TBSI VDSI One month weakness: AMZN, ISRG, SYNA, GRMN 10 days weakness: SNDA, MTW, AMZN, SYNA, GRMN, NILE. Now if you had done your homework and sorted the list by the filter a day before, you would anyway be anticipating breakouts on all these stocks and could have entered in anticipation or as soon as the stock started moving on stock like NILE. So for aggressive traders looking to capture such moves using the weakness filter and pre deciding which stocks to buy gives you an edge. I often hear IBD 100 does not work or IBD 200 does not work or IBD approach itself does not work, well if you know how to make things work, you can make any approach work. As a trader you make money if you can make an idea or concept work. I will have more on this later.

Related post: Using minor weakness to time IBD 100 entry

Later: Three Problems and Profitability

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6 comments:

threadogg said...: Pradeep,
Your explanation is simple and well said. Your screens helps us who have little time keep focused on the strong stocks. Enjoyed listening to your interview this past week and hearing about your journey into the financial world. Thanks for sharing.; Oct 9, 2007, 12:46:00 PM
Pradeep Bonde said...: Thanks; Oct 9, 2007, 12:50:00 PM
dgd said...: Hi Pradeep--
Could you give a little detail on your entry method assuming you were watching the list intraday? Do you buy any 2% breakout on the list as it occurs? Do you wait for a specific time of day or confirmation of some sort to enter? Thanks.; Oct 9, 2007, 1:51:00 PM
Pradeep Bonde said...: If I want to buy I would pre decide based on weakness, which 5-10 I am most interested in buying, once there is 2% price move on volume I will buy.
Based on my experience and studies, a IBD 100 stock which is going to break, in 95% of the cases, breaks by 10 or 10:30. With thousands of people following the list, everybody jumps in when things start moving. So waiting for confirmation is not very helpful.
Now all this for strictly swing trades where you are looking for 10 to 20% swing, not for investors. Most of the time the stock will make 6 to 10% or more on break day itself. So by getting in at 2% you get 4-6% cushion to hold the trade.; Oct 9, 2007, 2:52:00 PM
Mike G said...: I don't see where you narrowed down from your list which stocks you would buy.

I have used IBD 100 and I usually go for those that are forming a base, that are not more than 5% extended over the last few days, that have pulled back to their 10 week moving average. IBD is pretty clear witha simple set of trading rules for their picks and they work, as long as you don't jump on stocks that have already moved too much.; Oct 10, 2007, 11:14:00 AM
Pradeep Bonde said...: 10 week =50 days.So IBD says use 50 days weakness to time entry. If you are investor or intermediate term trader using 50 days weakness will work.

For aggressive traders using a 10 day weakness or 20 day weakness is better to capture a smaller slice of the trend.

Many fast moving IBD 100 stocks do not pullback to 10 week moving average.; Oct 10, 2007, 11:23:00 AM

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