Since March this has been a dream market for swing trading | stockbee


Since March this has been a dream market for swing trading

Market Monitor  

Daily# of Stocks Up >4% on high volume445
Daily# of stocks down >4% on high volume        59
Primary# of stocks up >25% in a quarter3383       
Primary# of stocks down >25% in a quarter223
Secondary#of stocks up >50% in a month31
Secondary#of stocks down >50% in a month3
Secondary#of stocks up >25% in a month221
Secondary#of stocks down >25% in a month41
Primary fast        MM 34/13 + 3014      
Primary Fast        MM 34/13 - 596

  • Current Market Monitor readings indicate a market prone to dips. 
  •  A small dip in market is immediately bought. That has been the way the market has been acting for last few months.
  • We continue to hover near the breadth high on # of stocks up 25% plus in a quarter. 
  • So we continue to oscillate between 3000 and 3400 figure on # of stocks up 25% plus in a quarter.
  • This brings me to my point about "What are common continuation formations"  post. You will see today that lot of the stocks forming those kind of pattern broke out.
  • What we see is a second leg of a move starting in some of the stocks which ran up a lot in first phase. 
  • That has been the pattern. New sectors keep breaking out.
  • We have few large 50% plus moves , but large number of 10 to 20% kind of moves. The MM 34/13+ scan shows that.
  • If you go through the 3014 stocks in that scan you will notice several moves of 15 to 20%. Stocks are stalling after such moves. The 50% plus moves are mostly in junk stocks.
  • In such environment finding a 20% kind of trade is what I am focusing on everyday and we have been successful in finding many of them. The trick is aggressive profit taking. Because moves are stalling around 20% level, you have to quickly take profit around 15 to 20% level when you have them. 
  • Today is one of those days where we have abundance of stocks with 20% plus move potential .
  •  It is a good problem to have when you are fully invested and you see so many new 20% opportunities. 
  • The other beauty about this market currently is that those 12% to 20% kind of moves are happening in mater of days and many times you are getting 10% for just holding overnight.
  • Since March this has been a dream market for swing trading. Abundance of moves, moves have follow through and moves achieve profit targets in half the time of what it would take in normal market. 
  • How long this phase will last we do not know but what we know is  that Market Monitor will give us a signal on trend change. So till that happens it is a bull market.
  • Let us look at in detail some of the trades we initiated yesterday and closed yesterday.
  • GIII: 21% profit for holding overnight. What more can you ask for. So in this trade we have closed 75% of the position and we will let rest run.
  • APAC: We had 15.72% profit in first leg of this trade and we got stopped out at 6.0% profit in second leg. Stock has the right catalyst+fundamentals for growth stock  but did not follow through on breakout. Learnings, we should have been more aggressive in profit taking at 15% profit level when we had them.
  • BPI: 20% profit on half of our position and we are letting rest of it run with tight stop to protect profit. Stock has catalyst +fundamental for a big move but as I have been saying , stocks are stalling at 20% kind of profit levels in recent weeks. So it is better to book 15 to 20% profit when you have it.
  • LFT: we got stopped out for a 1.5% loss. I always like stocks which have immediate follow through after a EP. When this did not do that after having a very good catalyst, I had moved the stop to very tight level. The stock still has potential for 20% move and might b/o here. 
  • Now let us look at some of the trades we I initiated yesterday and the reasoning and method behind them continued.... 

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