Gary Kaltbaum setup
GK is a O'Neil follower. He is money manager and has a popular radio show where he talks about stocks.
Essentially his basic idea is same but it took him 10 years to become profitable. In 1990's he undertook a systemic study on Wall Street's most successful traders and investors in last 100 years. That is how he stumbled across William O'Neil approach.
He trades a simplified O'Neil method. You will find couple of nuances that are different. He found through his research that the most reliable pattern for explosive moves is a stock that often moves sideways for a long period of time before it makes a strong move higher (or lower)
He buys breakout on such stocks if they have massive volume on b/o day. He defines long base as a base with at least 8 weeks sideways base.
His method in short:
1 identify 8 week or more duration base. Longer the base better it is. Flatter the base better it is (Darvas box remember)
2 Look for short term tightening of the trading range for 3 to 7 days near high of the base.
3 watch for a buy on breakout above range high.
4 volume on b/o day should be 3 times average 30 day volume for small and mid cap and above 1.5 times for large cap.
For working people this is a simpler approach to trading momentum/growth stock instead of going in to lot of complexities.
His site is : http://garyk.com/
His book is : The Investor's Edge
Reproduced from the Stockbee members site. On the members site there is more extensive discussion on these setups and how to set them up in Telechart.
Related:
No comments:
Post a Comment