1/31/2013

A bit of selling in small caps


The small caps are showing some signs of selling. The technology large caps continue to struggle and the Nasdaq 100 has been finding it difficult to participate in this rally.

It is too early to say rally under pressure. For that breadth will need to deteriorate further. The bullish sentiments continue to rise and you see front page of newspaper and they have stories about individual investors coming back in the market. That by itself is not a reason to worry as sentiments can remain elevated for long before market can top.

Overall the moves in individual stocks are muted with many not making much headway after breakouts. 

1/30/2013

How to find long term winners

Stock markets have different kind of winners. Some stocks can make big move in 5 days and after that end up all the gains. Similarly some move only for a month. But there are some special kind of stocks that make longer term multi year or multi year moves.

The multi cycle winners are stock with longer term momentum. These stocks make a move for few months or quarters and then correct but do not breakdown. They recover from their correction and go on to make another move.

The best one are the ones which do not correct more than 30% from their high. They have extremely powerful momentum. Such stocks are rare breed that have something going for them. The reason they do not correct much is because the holders do not sell and new buyers continuously buy at dip.

If you are looking for a position trading ideas or swing trades of longer duration and magnitude than few days or weeks this is where you need to focus.

In order to find such stocks look for top 100 to 300 stocks with one year momentum that have not had more than 30% correction during their move from beginning of the trend. There will be very few stocks like that in current market. In different market circumstances where growth stocks dominate, you can find many.

Some examples of these kind of stocks are:




If in next correction cycle such stocks again refuse to dip below 30% from high and go sideways for few months, then they offer powerful breakout setups. Most long running stocks with growth story will show you this kind of pattern. They continue to grow for multiple cycles as against other flash in the pan growth stocks which can just grow for few quarters.

For working people and part time traders such stocks can allow you to identify buying opportunity well in advance and you can do your work over weekend.

To do so start with a Top 200 stocks by one year momentum list like below band set it up in a software like Telechart and then look for stocks that do not dip more than 30% during duration of the move.

Top 200 Stocks with one year momentum:


ACAD
ACAS
ACHC
ACRX
AEG
AEGR
AHS
AHT
ALJ
ALNY
AOS
APO
APOG
ARMH
ASGN
ASTX
AXLL
AZZ
BANR
BC
BCEI
BDBD
BDC
BECN
BIOS
BKD
BLDR
BMRN
BRP
CAR
CAS
CFNL
CHMT
COG
CONN
CP
CPA
CRAY
CSOD
CSU
CTB
CVD
CVI
CVLT
CX
CYH
CYMI
DAL
DGI
DIN
DK
DLPH
DLX
DORM
DPZ
EEFT
EMN
EPL
EQIX
ESC
EXP
EXPE
FBHS
FLT
FNF
FNGN
GEO
GIL
GILD
GLDD
GNRC
GPOR
GRFS
GTN
GVA
GWR
GY
HAFC
HEES
HERO
HFC
HMA
HSNI
ICA
ICON
INFI
INXN
KBH
KCAP
KEP
KERX
KKD
LAD
LCC
LEDR
LEN
LL
LNDC
LNG
LNN
LPX
LYB
MCO
MDSO
MHK
MHO
MIC
MMS
MPC
MPEL
MTZ
MWA
MX
N
NCT
NLS
NRF
NXST
OCN
OSK
PCRX
PCYC
PDFS
PHG
PHH
PHM
PJC
PMT
POL
PPG
PVH
QIHU
QUAD
RAX
REGN
RJET
RMD
RNF
ROCK
RSE
RTEC
RTK
RWT
RYL
SAH
SBRA
SCS
SEAC
SFUN
SGMO
SHLM
SIRI
SIRO
SMA
SMP
SNFCA
SNTA
SNTS
SODA
SPB
SPF
STAG
STRZA
STZ
SXL
SYRG
TASR
TCX
TEX
THC
TISI
TMH
TREX
TRS
TRW
TSO
TUES
TVL
TXI
UBS
URBN
URI
USG
VAC
VLO
VMC
VMED
VVI
WD
WGO
WHR
WLK
WNR
WOR
WY
XIN
XXIA
ZQK



Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

1/29/2013

Many top momentum stock extended

Momentum stocks are the stocks leading the market advance. Momentum stocks tend to move in momentum bursts of few days to week. After that they tend to pullback or go sideays and then make another move.
Swing traders focus on momentum stocks for their explosive moves. A momentum stock can sometime make a 20 to 50% move in few days. Recent example of that is ENOC , in just 4 days it went up over 39% from 11.50 to around 16.


Swing traders monitor  the top 100 or 200 stocks by six month momentum. Such stocks offer good swing trading candidates. What you have to look for in the list is stocks undergoing orderly range contraction. Those stocks are potential candidates for breakouts.

The following 50 stocks are currently top ranked by 6 month momentum. Most of them are extended on a 5 to 10 day time frame. But some like OCN and GNRC are possibly setting up for swing breakouts.

Top 50 Stocks by 6 month momentum


ACAD
AEGR
AHS
ALJ
AMRI
APOG
BCEI
BDBD
BGFV
BRP
CBK
CLWR
CRAY
CSU
CVI
CYMI
DGI
ENOC
EXP
GNRC
HW
INFI
KBH
KKD
LL
LPX
LYG
MHO
MWA
NLS
OCN
ODP
OMX
PCYC
PHM
QIHU
RDN
RYL
S
SFUN
SGMO
SNFCA
SNTA
SNTS
STC
SYRG
THC
TVL
USG
WGO
YMI
ZQK

1/26/2013

Momentum stocks setting up for breakout


Stocks with momentum in various stages of consolidation for possible breakout entries in next few days. Some have very linear setup and are undergoing orderly pullbacks.  These stocks have established momentum on quarter basis and in many cases have first leg of rally. After that they are setting up for possible second leg breakout. 






ABR
AMBA
AN
ASTX
AVG
CBK
CTB
EGN
EGOV
ENOC
EXH
FSLR
FSS
GA
GIL
GNRC
HOV
HPQ
INFY
LAMR
LFL
MDCO
MDSO
MGM
MKTG
MNTA
MS
MX
PNC
PNK
POL
RTEC
SDT
SFUN
SONS
SPWR
TASR
VAC
VOXX
WOR
YPF

1/25/2013

What is a good swing breakout setup



  1. It is a first or second b/o in the swing after start of the move
  2. Look for younger trends where you can enter on first or second b/o
  3. All things being equal low float stocks are preferable
  4. All things being equal stocks with explosive earnings or immediate catalyst preferred
  5. If stock gaps up with very big gap of 20% plus, it has high likelihood of pullback or inside day next day and may not be immediate mover
  6. Stocks with very high volume on b/o are preferred.
  7. Pay special attention to stocks with all time high or multi year high volume on b/o day
  8. Prior to breakout there is 5 to 20 days of shallow pullback or sideways move
  9. During the pullback or sideways move there is range contraction
  10. Prior to breakout day stock has very narrow range bar or negative bar
  11. Stock is not up 3 days in a row
  12. The move prior to correction/sideways action should be linear
  13. On breakout day there is volume and price surge
  14. On breakout day stock closes near high
  15. If ideal setup do not show up wait for it rather than taking marginal setup

1/24/2013

Watch the breadth

The market has continued to act well. There has been a steady buying pressure and dips intraday have been bought aggressively. So far market has not had any meaningful pullback.


Breadth has seen continuous improvement and is currently reaching extended zones. If you track the Worden T2108 (% of stocks  above 40day moving average), you will see that it has been above 80 for few days. Such high readings do not immediately lead to correction. Many times the readings persist at elevated level for weeks.

At the same time the sentiment indicators are showing extreme readings. If you see the Investors Intelligence survey readings , they are at 53.2% level. Such high redings often indicate excessive bullishness.

But the real sign of trouble would be in the breadth readings. As and when breadth starts to deteriorate , it will tell you the move has ran in to trouble.

1/17/2013

Breakout Anticipation Watchlist for Jan 18, 2013


Stocks with  3 month momentum, that are setting up for possible breakout in near future.
AMTD
ARCO
BPZ
CODE
DLLR
FCN
FSS
INVN
LHO
MLM
POL
RAX
SBGI
TASR
TRS
UAN
VALE.P
VVI
Z

Sideways market

The overall market has not gone anywhere since 2nd January. All the gains happened in 2 days. For last 10 trading days it has been a slow churn.


But if you forget the overall market and focus on setups, you would see lot of breakouts are happening and also there is good follow through on right kind of setups.

In the universe of 1298 stocks with momentum there are at least 30 good setups pre breakouts. The top 20% stock by momentum show promising action as of now.

Large stocks have had some trouble and AAPL is prime example of that. In the 262  stocks with highest 90 day cash flow the big winners in last one month are F, CELG, STX, RIG, DELL, WDC, GM, GS, and HPQ.

1/15/2013

Breakout Anticipation watchlist


These are stocks with three month  momentum that are having range contraction/ pullbacks currently and will likely breakout in next few weeks.

AUMN
AVG
BCEI
BGS
BPZ
BX
BYD
CXW
CYT
CZR
DYN
EJ
FAF
FIG
GA
GASS
GNK
GPRE
H
HOV
IDTI
ISIL
JCOM
JEF
KBH
KELYA
KFRC
KRO
LEA
MBT
MPO
NRP
NTGR
PHH
PNK
RDN
SGI
SYRG
TBI
TC
TNGO
TNP
TRIP
TRS
TSN
TSU
USG
VHS
WOOF
XNPT
YPF

1/14/2013

Many setups



Breadth is in extreme territory, but the market is correcting by going sideways. It is not a runaway move. You will see that in the trend of stocks up 25% in a month.

Lot of stocks after initial breakout have gone sideways or in some cases faded the b/o move.

As far as setups are concerned many stocks are in sideways range contraction mode. That bodes well for further breakouts. The list of stocks below is in various stages of forming sideways range contraction patterns. 

ABC
ACHC
ADTN
AMSG
AOL
ARNA
ARRS
AUMN
AVG
BMRN
BONT
BPZ
BYD
CFX
CLB
CMG
CZR
DELL
DFT
DWA
EJ
FCN
FSS
GRPN
GSVC
HDB
HOGS
HT
IBN
ICPT
INAP
ISIL
KAR
KBH
KMX
LAMR
MAR
MBT
MINI
MSCI
NUE
OI
PMCS
PXD
PXP
RATE
RDN
RHT
SAH
SATS
SFLY
SGMS
SUSQ
TEX
TNGO
TQNT
UFS
VMED
VVI
WFT
WOOF
WST

The large number of potential setups is a good sign for potential breakout trades. 

1/10/2013

How to find bearish swing trading setups



The concept of range expansion and range contraction also works on bearish side. If you are a new swing trader focus your energies on these kind of high probability setups. Scan for these kind of setups. Set yourself for finding these kind of opportunities.

In these kind of setups you have lot of time to plan your trade and be ready when it breaks out or breaks down.






Bearish Swing Setup

Same idea of range expansion and range contraction works on bearish side but you do not find many candidates like these on day to day basis unless we are in longer duration bearish move.





Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

1/08/2013

A range contraction setup example

YPF had a series of range contraction day and as a result I was anticipating a breakout on it. Today it had range expansion and we entered it intraday.


Anticipating breakouts like this can give you low risk entry points and instant profit post entry if the trade works. Everyday developing a list of such stocks likely to breakout gives you a watchlist for next trading day.

1/07/2013

How to use range contraction



As I said on Friday for beginner trader a structural understanding of market is key. One of the widely used methods by swing traders for hundred year or more is based on this understanding of range contraction and range expansion.


Periods of range contraction and volatility compression tend to be followed by periods of range expansion and volatility expansion.


Periods of range contraction and volatility compression tend to be followed by periods of range expansion and volatility expansion.


This is an empirical observation on stocks moves for hundreds of years. Now if you understand this you know what to look for in a stock. Find stocks that are in range contraction phase

Most swing trading methods are based on understanding of this phenomenon. 

1/04/2013

Understanding range expansion can help new traders


I get lot of emails from the readers of this blog asking where should they start if they are new to trading. It can be very confusing for new traders to decide what to focus on with so many blogs and books around.

The starting poit for any new trader should be by understanding a very basic market structure phenomenon of Range expansion. That is the most basic behavior of market. Stocks or ETF go through several range expansion and range contraction cycles. These cycles provide you a way to build your trading methods around them.

Stocks exhibit several range expansions during trends. Trends are never completely linear. Let us say a stock makes 100% move in 100 day, it does not make that move in increments of 1%. It makes it in series of impulse moves.

In reality the 100% move might just happen in 15 to 20 days out of the 100 days. As traders observed this phenomenon , they developed methods to exploit this market tendency.

By trial and error they refined several methods based on range expansion or range contraction. The evolution was craft based. Now with easy availability of computing power the same methods have moved to computers.

In order to make range expansion or range contraction based trading work for you, you have to move from the concept to trading methods. Fortunately there are literary thousands of range based methods in public domain. 95% of swing trading methods are based on range expansion or contraction.

If you study them , you will not be reinventing the wheels.

1/03/2013

Breakouts a galore

Last 2 days have seen huge number of stocks breaking out. There has also been good intraday as well as next day follow through on them.

After two days of big gains market might spend time digesting the move  but the breakouts on underlying stocks will continue. Any simple breakout scan would give you lot of candidates to work with.

Breakout based methods work best in momentum markets. This market may be entering that phase. A combination of momentum and pullback based methods can give you trading candidates throughout the year. 

1/02/2013

S&P Returns from 1926 to 2012

Market has an overwhelmingly positive bias. From 1926 to date the S&P has been down more than 20% on calendar year basis only 6 times.

A good start to the year

Relief rally at work after the fiscal cliff deal was passed. The market was under pressure due to the overhang of the deal. However selling was mild and breadth was not deteriorating. As soon as the clouds were lifted the market rallied big on 31st.

The small correction has resulted in many stocks having orderly pullback or going sideways. As the market enters rally mode, more of them will breakout.