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Choppy action

Posted on 5/30/2013
There is a subtle change in tone of the action. Below the surface many high flying stocks are now in correction and more are joining the rank. The Worden T2108 indicator is now at 53.97. That indicates only 53% of stocks are now above their 40 day moving average. The T2108 was at 74 just few days ago.

However dip buyers continue to be active and indexes have closed well of their high 3 days in a row. Hurry to sell is lacking.

The stocks with momentum are undergoing rotation and new stocks are emerging.


RVLT is ranked 16 by momentum and was consolidating for few days and had a nice breakout on high volume yesterday.

Top 25 ranked stocks by momentum


  1. rsol
  2. yrcw
  3. vrml
  4. scty
  5. tsla
  6. csiq
  7. clnt
  8. htch
  9. jaso
  10. plug
  11. vnda
  12. mnkd
  13. noah
  14. esi
  15. tmus
  16. rvlt
  17. cnit
  18. hsol
  19. unis
  20. insm
  21. ostk
  22. nsph
  23. spwr
  24. iqnt
  25. sdbt
I am watching IQNT, ggs, lllen, ctrp, rh, chci and couple of more for possible breakouts from Top 100 ranked momentum stocks. 


Rotational correction

Posted on 5/29/2013
The market had a great opening which was quickly faded once first hour was over. Many stocks that had early morning breakouts faded by end of the day. All in all not a convincing positive day.

As market is as of now having mini correction/pullback, many high flying momentum stocks are also in same mode. But at the same time money keeps rotating and new stocks are emerging to take on the leadership from the current leaders.

Some stocks like TSLA continue to be in good momentum phase.

The momentum ranking is having some changes as this rotation continues.

Top ranked stocks by momentum:


  1. rsol
  2. yrcw
  3. vrml
  4. scty
  5. tsla
  6. csiq
  7. htch
  8. jaso
  9. clnt
  10. vnda
  11. esi
  12. rvlt
  13. plug
  14. tmus
  15. mnkd
  16. noah
  17. ostk
  18. unis
  19. egle
  20. spwr
  21. iqnt
  22. insm
  23. ggs
  24. drl
  25. llen
  26. ecty
  27. aegr
  28. dang
  29. nsph
  30. hsol
To find new leadership you have to go down the ranking and look at stocks ranked 31 to 100. In that some stocks are having very orderly pullbacks and they will be the first to breakout once market correction is over.

Top stocks continue to hold gain

Posted on 5/28/2013
Market suffered a bit of distribution last week. However follow through selling was lacking. The stocks with momentum continue to hold well.
YRCW continues to hold its number one rank in momentum universe. RVLT seems to be setting up well for a possible breakout.

Top 25 stocks with momentum


  1. yrcw
  2. rsol
  3. scty
  4. vrml
  5. tsla
  6. csiq
  7. htch
  8. jaso
  9. rvlt
  10. esi
  11. egle
  12. tmus
  13. spwr
  14. ostk
  15. vnda
  16. aq
  17. iqnt
  18. mnkd
  19. unis
  20. nbg
  21. mobi
  22. noah
  23. llen
  24. ecty
  25. ggs

What happens to momentum stocks during corection

Posted on 5/23/2013
When trading momentum overall market can have an effect at extreme momentum phases. In last couple of days we were witnessing extreme momentum. Some of the momentum readings I monitor on daily basis were at highest level since August 2012. Such extreme momentum phases tend to be short lived and result in corrections. We saw one of those yesterday.

When corrections hit the market, momentum stocks can take bigger hit than average stock. But it is not uniformly true. Not all momentum stocks get hit equally. You will see that in the Top 25 ranked stocks yesterday and same thing happens over longer period.

During correction there is rotation in leadership and :

Reversals: some stock reverse and that is the end of their momentum phase for foreseeable future

Orderly Pullbacks: some stocks do not want to go down as holders of the stocks and buyers of the stocks believe stock has more room to run. They just go sideways or have very minor pullback. They are the first to breakout once selling in Index abates.

Volatile ranges: Some stocks go in to volatile and wide ranges. This indicates end of momentum phase and start of range bound phase.

Rally: Some stocks defy the overall weakness and continue to rally. These are the new leaders.

Top 25 stocks by momentum rank



  1. yrcw
  2. vrml
  3. rsol
  4. scty
  5. tsla
  6. csiq
  7. rvlt
  8. esi
  9. htch
  10. nbg
  11. ostk
  12. spwr
  13. llen
  14. ecty
  15. tmus
  16. iqnt
  17. egle
  18. eac
  19. jaso
  20. unis
  21. evc
  22. mobi
  23. noah
  24. regi
  25. ggs
YRCW continues to hold its number one rank as of now. Some stocks like VRML, MOBI, and MNKD continued to rally in face of overall weakness. NVTL as of now seems to be undergoing orderly pullback, something I am keeping an eye on.




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.

What drives momentum

Posted on 5/22/2013
Momentum moves are triggered by some news. A surprisingly good or bad news often leads to start of a momentum move.

This kind of move can be of many types. But the one news with potentially big impact is earnings news. Earnings have the potential to lead to start of multi month or multi year moves.

Sector is another big catalyst. If a sector move gets going the good , bad and ugly companies in it can make big moves. You will see that in solar stocks currently. There are bubble type momentum bursts in these stocks in last few weeks. If you look at the fundamentals of many of these stocks, you will see that they are terrible and likely to be terrible for foreseeable future. But momentum does not care about it.  If a stock has momentum you need to keep all other logic aside and just look at it as trading candidate.

In industries with long order to production or implementation cycle, news of new order can lead to start of big moves. This is also common in project based industries like heavy construction, defense, aerospace and infrastructure. 

The biotechs are a class by themselves. There are two types of biotechs in market. The bigger established companies like AMGN, BIIB, CELG, REGN, VRTX and ALXN have real revenue. The second category of biotechs are developmental stage biotech that trade mostly based on expectations of FDA approval or results of clinical trial.

The cyclicals trade based on expectations. They rally ahead of their actual earnings improvement as market participants can anticipate good times. When they have good earnings, they might be about to top. These are deep cyclicals and many of them like coal, shipping, heavy construction  commodities can go through multi year boom burst cycle. Currently the commodities are going through burst cycle while 7 or 8  of years ago they were in big secular up trend.

Besides these catalyst there can be many other catalyst like govt policy change, wars, drought, terrorist attacks, disease outbreak and so on. You will see stock moving based on these kind of news if the news is game changer. Post 9/11 the market was closed for many days. Once it opened one small company InVision Technologies, Inc. (INVN  was the ticker for it that time. Has been bought subsequently by GE)had a big high volume breakout. That started the big rally for the stock, it went up 100% in few quarters.

When you look at the top 25 stocks by momentum , try and find what was the catalyst at beginning of each of these moves. That way you can build skill to identify a future momentum leader.

Top 25 stocks by momentum

  1. yrcw
  2. vrml
  3. tsla
  4. scty
  5. csiq
  6. rvlt
  7. rsol
  8. nbg
  9. ecty
  10. ostk
  11. llen
  12. esi
  13. spwr
  14. tmus
  15. htch
  16. iqnt
  17. eac
  18. evc
  19. egle
  20. unis
  21. regi
  22. mobi
  23. byd
  24. nvtl
  25. noah

As of now the top 25 stocks by momentum are dominated by the solar industry stocks. Many of them had reversals yesterday due to analyst  downgrades. YRCW the trucking company continues to hold its top rank. LLEN out of this is having a pullback and I am watching.


Top momentum stocks

Posted on 5/21/2013
The market continued to show momentum. As many stocks are extended, the theme was sector rotation. Beaten down sectors like gold, silver, commodities and some very low priced stocks were attracting buying yesterday. The energy sector continues to show good action and solar stocks are making parabolic moves.

The top stocks by momentum are lead by YRCW. YRCW was a beaten down trucking company for years after a merger went bad. In last 13 session it found buy interest and is now momentum leader. YRCW kind of turnaround stories with deep problems are the theme of the market currently.


TSLA is another big mover in the momentum ranking post its earnings. And the solar stocks are obviously the big winners.

Top 25 stocks ranked by momentum

  1. yrcw
  2. trmd
  3. vrml
  4. tsla
  5. scty
  6. csiq
  7. rvlt
  8. llen
  9. ostk
  10. nbg
  11. ecty
  12. tmus
  13. spwr
  14. iqnt
  15. esi
  16. eac
  17. evc
  18. byd
  19. htch
  20. regi
  21. nvtl
  22. unis
  23. amd
  24. cprx
  25. NBG

NBG out of this had uggly down move yesterday.



Two good setups: TASR and HLF

Posted on 5/20/2013
Bulls continue to dominate the action. IPO continue to show some big moves. Solar sector is the star sector with several stocks in the sector on the move.

While there are many extended stocks currently, there are some setups on non extended stocks. Two of the better looking ones are TASR and HLF.



HLF has high short interest and as a result can lead to short squeeze. 

Breakouts continue

The red hot momentum phase continues. Some stocks are making big one day move , in some cases on marginal news. Gaps are common on news. 

The sentiments are also improving and as you saw on Friday the Consumer sentiment is now back at 2007 level. IPO's had best month. Many up 50% plus on first day. And more IPO's are expected  to hit the market this month.

Record number of buybacks are being announced. NOC was latest to join the party with 4 billion buyback announcement on Friday. The merger and acquisition activity is increasing.

As of now the breadth is not extremely bullish, so rally might have more room to run.

Magnitude of moves

Posted on 5/16/2013


Good Bull markets are characterized by explosive swing moves. In last 3 or 4 days we saw some of that on a narrow set of stock. In many good bull market this kind of action is more widespread.

These kind of explosive moves in a short time period of 3 to 25 days are the momentum bursts. Stocks make such momentum bursts and go sideways, pullback , or reverse. Next set of stocks then breakout. This kind of rotation is characteristic of bull moves.

The number of stocks up 25% in a month and 50% in a month help you gauge the magnitude of moves happening in the market. In last 3 days those figures ticked up in this long running rally.



That can also be an indicator of final blow off stage. Or it can be indicator of more normal market action. These numbers have dramatically picked up in last few days. Last time we saw these kind of numbers was in August 2012. 

This rally has been characterized by low magnitude moves. But in last few days that is changing.

Stocks move in momentum bursts of 3 to 5 days. These momentum bursts last only for short duration but can be of 8 to 40% magnitude. Smaller stocks tend to make bigger moves. Bulk of the swing trading methods have eveloved to capture these kind of momentum bursts moves. 

Red hot momentum

Posted on 5/15/2013
The market continues to exhibit red hot momentum. Such conditions are ideal for breakouts and pullback trades.

The participation of stocks in the rally has started to improve in last 3 days. More sectors are breaking out.

The rally so far was characterized by lack of explosive moves. Explosive moves are moves that are 25% plus moves in a month. In last 2 days the number of stock making 25% move and 50% move has ticked up. 

Momentum continues

Posted on 5/13/2013
Market continues to show good momentum. New sectors continue to breakout. At this rate we will son be approaching extremely bullish readings on T2108. But excessively bullish readings by itself is not a cause for becoming bearish. Markets can remain extended for extended period of time.

Breakouts continue to find buyers for next day or so, but big follow through is missing. We monitor daily number of stocks up 50% in a month. That figure in current market is 8 , which is very low. In bull markets readings above 20 on this are common and readings above 50 are not uncommon at this stage in rally.

This remains a small moves market. Moves of 10 to 15% dominate the action.

Stocks in play and PEAD

Posted on 5/08/2013



Stocks in play are stocks with fresh news after the close or before market open. Fresh news leads to fresh moves.

Everyday hundreds of stocks release news before and after hours. These news releases can lead to stock making big move for the day.

When news is released either it is already discounted by the market or the market is surprised by it. The stocks can either go up or go down.

A heavily shorted stock on good news can lead to short squeeze. A heavily favorite of fund stock similarly on surprisingly bad news can tumble.

Announcement related to earnings in either as guidance or actual earnings have potential for starting or ending multi month moves.

This phenomenon is called PEAD or Post Earnings Announcement drift. It is considered a market anomaly.
In a perfectly efficient market a news should get discounted immediately and there would be no way to profit from it.

So let us say a stock releases significantly better earnings. If such earnings is going to lead to doubling of the stock, then at open it should gap up to the double price and there would be no way to profit from the new information.

But markets are not efficient. What happens is the new surprise gets priced in over time. This is what the PEAD phenomenon is about.

When companies announce earnings, if the earnings are significantly better or worse than market/analyst expectations then the company stock goes up or goes down for next couple of months.

Post Earnings Announcement Drift or Pead is 40 year old discovery.

Ball and Brown in 1968 first documented the PEAD anomaly in their ground breaking study that challenged efficient market hypothesis.

What does the study show. it shows that if you form 10 portfolios of stocks ranked by their earnings surprize then the portfolio of stocks that are in top 10% by earnings surprise outperforms the 9 other portfolio and similarly the bottom decile portfolio under performs the nine other deciles.

This is the most researched topic in financial field. Every year at least 50 new papers are published on PEAD and is persistence.

Stocks react vigorously to earnings acceleration.

After a few quarters of earnings acceleration, every one notices it and the reaction is more muted as the earnings get discounted.

While there is a vast effort by many speculators to anticipate such earnings acceleration and take positions in anticipation, even if you react to earnings and enter after the earnings announcement, you still can catch bulk of the move.

Typically first earnings acceleration is followed by more earnings acceleration or the improved earnings continues.

The structural factors which contribute to earnings acceleration do not disappear in one quarter. That is why earnings trends persist and price trends persist.

PEAD phenomenon is more pronounced in thinly traded stocks.
PEAD phenomenon is more pronounced in stocks with no analyst coverage.
PEAD returns persist even after one quarter.
PEAD is more pronounced on stocks with revenue surprise in addition to earnings surprise

While day traders look for one day moves on earnings day, for position traders or swing traders the PEAD phenomenon can offer longer duration picks.

After the day trading frenzy is over in these stocks , in many cases, they pullback and setup and go up after a breakout.

PEAD was relatively unknown phenomenon among retail traders around 6 to 7 years ago . Now everyone is aware of it and as a result many PEAD stocks tend to move big on earnings day often going up 20- 40% and then spend several weeks pulling back .

Buying after earnings is less risky as the news risk is out. However companies use the good news to time secondaries and this can lead to stocks with good earnings dropping aster few days of rally after earnings.

Secondaries for growing stocks are not a big problem as long as the money is used for expansion. Secondaries where the owners sell aggressively can be rally killer for a stock with excellent growth.

KORS is a poster child for this. After every good earnings announcement the owners have aggressively sold stocks in secondaries.

Buying after earnings is good strategy for position traders.

In a market driven by growth , you will find small companies offer best PEAD opportunities. In inefficiencies are greater on them.

When looking at earnings news, you also need to look at guidance. If the guidance is not in line with expectations, stocks can drop on earnings even if earnings are good.

Same way a stock with bad earnings will make big move if the guidance is good.
Larger companies are masters at manipulating investors earnings expectations through forward guidance and pre announcements. Genuine surprises on large caps tend to be rare. But when they happen they can signal significant shift in underlying business dynamics.

Best opportunity related to earnings is in small unknown company that suddenly starts growing rapidly.

When a small company with say below 50 million revenue starts growing suddenly in increments of 250 millions per quarter then you get explosive situation. This kind of growth happens in new segments or consumer products.

For example NTRI , CROX and HANS (now MNST) during the 2004 to 2007 periods became billion dollar plus companies in span of 4 to 6 quarters and correspondingly the price of their stock went up milti fold.

For a consumer product company with hot product , it is easy to grow rapidly as US has 300 million plus hungry consumers and if a product becomes hot must have product , it is easy for the companies to just plug in the product in existing distribution channel. Besides that most consumer products tend to have high margin.

For position traders finding such extreme growth situations should be top priority. A hot growth company if it takes off can make very explosive moves.

While such moves are not common in this market, there are market periods when such stocks dominate the market. This happens when new industry is being created. During the intenet expansion from 1990 to 2000 you had several hundred such companies. In the bull market of 2003 to 2007 the growth in BRIC countries and in commodities created hundreds of such extreme growth situations.
Become an extremist

Look for extreme earnings growth (just starting out to grow)

Look for extreme sales growth (just starting out and of magnitude likely to make the company a billion dollar company)

Look for extreme price strength ( just starting young trend with explosive first leg)

Look for extreme neglect (multi year , low float, low volume

You have to be first to find them as early as possible and not when everyone knows about it...
That is where big opportunity is in reading news.....




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.

Big moves need big catalyst

Posted on 5/07/2013

8 to 40% move in stock is common and requires no catalyst.

But a 100% plus move is not common and it requires some catalyst...

When a stock doubles, there is some major reason behind the move...

If you want to catch big moves , look for stocks that doubled and then pullback or consolidate for few months...

Those are proven horses....

Something is going right for those stocks....


Catalyst that can lead to big moves

Earnings growth

Sales growth

New orders

Shortages

Govt policy change

Sector

Valuation

Turnaround

Drug approval or rumor of approval

in this market big moves are few. Unlike other market periods where at this stage there should be lot of big moves, we are stuck more in small moves market. That is largely due to lack of good growth stocks.

Range breakout

Posted on 5/06/2013
Market had established a wide range for couple of month. On Friday the range was broken to the upside. More follow through for next couple of days will confirm the breakout.

The breadth has improved in recent week. The  Worden T2108 indicator that tracks % of stocks above 40 day simple moving average is now at 71.56. Zones above 80 are extremely bullish zones.

Range bound action was characterized by sector rotation. That continues to be the theme. 

Small caps under pressure again

Posted on 5/02/2013


The bounce from a minor correction was relentless. But in one day most of the gains on small caps were wiped out.

Will there be another attempt at bounce. Repeated failure to make convincing high on small caps is sign of weakness.

Large caps still in good condition as of now. We continue to have the divergence on large cap and small cap.

What we have learned in this market is selling attracts V shaped recoveries on low volume. Which is lading to range.

Will it be different this time?

Furious sector rotation is another underlying theme in this market where money quickly rotates between sectors. But longer term trends on sector are few.

As of now unless we see another bout of 300 plus down day the range is more likely scene.