What can you learn from last weeks winners
The secret to making money in the market is your ability to make sense of these moves from last week.
Each of these stocks was up 20% plus last week. What can you learn from this
Go through them again and again till you find the secret sauce.
The best secret sauce observation in the comment/observations/analysis will win a Santa sweater.
FIVE
JANX
GRAL
VRNT
WOOF
GCO
SNTI
MNSO
CTRN
SNBR
HUHU
THCP
MRVL
DAN
CCRN
RBRK
BZFD
DAKT
MXL
TARA
JKS
PETS
ZETA
NVCR
KC
PRCH
HIMX
PPTA
HSAI
TELO
QURE
ROKU
SOUN
AUR
FSLY
QBTS
GRPN
PSTG
NNOX
DNA
SMCI
VSCO
SERV
ASAN
SFHG
BTDR
NCTY
ZJK
CRDO
NBIS
KROS
DOCU
LULU
Secret sauce is at 500 feet deep level not at 5 feet. Post your analysis in comments
Posts
11 comments:
Santa Rally :D
Building higher lows after an event, typically earnings
And volume momentum with engulfing candles or gap up through resistance levels. Seen even easier if lows were taken out recently. How’d I do?
I have reviewed the list of stocks that you provided which were up 20% last week and have grouped the stocks into five main patterns:
1. The BUY-OUT
i.e. CCRN
The company agreed to be acquired and price gaped up. No trade available here on the buy-outs unless you previously owned the stock.
2. POSITIVE EARNINGS.
i.e. FIVE, VRNT, WOOF, RBRK
Here the companies reported positive earnings and price gaped up.
Caution needs to be exercised on earnings as price can retrace significantly from the highs after the earnings announcement.
3. NEWS ANNOUNCEMENTS &/OR ANALYST UPGRADES
i.e. JANX, SNTI,
The company releases positive news or an analyst issues an upgrade.
JANX moved up due to promising outlook from their phase 1 trail.
SNTI also moved up due to positive clinical data and over subscribed private placement.
Care also needs to exercised when trading these as price can be very volatile (see SNTI which surged from $2 to 16.94 and then fell back to 5.50).
4. MOMENTUM PLAYS
The stock has been moving up for some time and continues to move up. These stocks show even more strength when they can break above a prior resistance area and stay above. And also are breaking out on high volume.
i.e. GRAL. In November it broke out of a multi-month consolidation area and then tested back into the area. It put in a higher low on November 18 and has been moving up since then. Last week price broke above two prior resistance areas (August 7 and July 17).
It can also help price when there is a “higher” short float. With GRAL I’m seeing a short float of 13.30%. So as price continues to move up and breaks prior resistance, it is likely that some shorts will start to cover their positions, thus driving the stock even higher.
These are great trades if you have a clear area to enter and price is not coming up to some prior resistance which may create some difficulty for the stock to break through.
...Post continued below...
...Post continued from above...
5. BREAK OUTS
There are a number of potential setups in this area. I mentioned a break-out from prior resistance areas above. But a stronger setup in my opinion is the pattern where the stock that breaks out, puts in a tight consolidation area then breaks out again. It also helps to see significant volume on the break-out and lesser volume when the stocks are consolidating.
This is a strong pattern that can keep repeating again and again. It also allows one to put a tight stop when entering (other side of the tight consolidation area) and ride the momentum up.
i.e. GCO
On November 25 stock broke above the highs of a multi-month channel. It then consolidated above the high for 5 days. The break of the highs of this consolidation zone ($36) provided for a great entry. You could have provided the stock with lots of room to work with a stop below the lows of the consolidation area ($32). And then trailed the stop up as price moved up. The stock hit a high of $43 on December 6.
BZFD is even a better example:
In November it broke the highs of a multi-month consolidation area. It then consolidated for a number of days before breaking out again. Only to consolidate and, you guessed it, break out again last week. If one entered on the break-out in November, they could be trailing their stop to below the lows of the prior consolidation areas.
I mentioned above that there are a number of different break-out setups. I thought I would end with a couple of additional examples in last week’s stock list:
CTRN it’s a gap and go example. With the gap and go, one could enter as soon the the stock opens ($22.24) and place the stock just below the mid of the gap i.e. around 21.45. (Based on the assumption that if price retraces more than ½ the gap, that the gap is not that strong). This would provide excellent risk to reward ratio (the stock hit a high of 26.50 on December 4.)
HUHU is an extreme case of a break-out. It broke out of a $4 – 5 range that formed since its IPO in October 2024. The price moved from an opening price of 4.65 to a high of 9.89. It then fell back on the same day to close at 5.11. The moral of the story, if you are trading break-outs, be sure to trail your stops to lock in profits.
Thank you for suggesting this exercise. I found it very informative and beneficial.
Rick
Disclaimer: The above is provided for educational purposes only. Nothing above is meant as financial, investment or trading advice. It is absolutely necessary that you do your own analysis before making any trade or investment. You should also consult independent financial professionals prior to trading and/or investing. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Trading is very risky and you can lose more than your account balance.
most of them show a small-range weekly candle on low weekly volume before the range expansion this week
FIVE - 150% earnings surprise, next day nearly double volume and massive gap up. After gap up, it started declining. The stock was already on the ascendency before earnings was announced.
JANX - $350m equity raise, this caused a gap up.
GRAL - Decent earnings back in november. Looks like a delayed earnings reaction. 3 flat days then boom. (3LYNCH)
VRNT - Decent earnings and Strong AI demand. Massive volume next day but declined afterwards.
WOOF - nothing here, big increase on earnings then fall.
GCO - 100%+ earnings. Was rising before earnings anyway.
SNTI - sky rocketed because of initial data from phase I cancer study. Massive volume surge but went down after that.
MNSO - rating upgrade from DBS Bank, big gap up on double volume
CTRN - Not the best earnings, gapped up due to analysts' opinions.
SNBR - Patrick Hopf acquires 900% more stocks. Insider trading.
HUHU - IPO, not enough data to analyse for me.
THCP - Sideway for ages, then volume before earnings kick starts growth
MRVL - Good earnings, AI demand. Big gap up after earnings but decline. Already a momentum stock so would not be surprised if this recovered to increase again. Lots of analyst upgrades too.
DAN - Analyst upgrades. Been going up since end of November, good momentum.
CCRN - buyout
RBRK - good earnings and momentum. Volume surge after earnings.
BZFD - Good earnings last month. Momentum stock. 3LYNCH, few days of small bars.
DAKT - Good earnings gap up and volume surge.
MXL - 3LYNCH. Volume surge. Insiders selling shares.
TARA - Super efficacy of bladder cancer cell therapy. Price targets change, slight decline after massive gap up.
JKS - Delayed earnings growth? Price target changed by analysts
PETS - Momentum stock. Delayed earnings reaction.
ZETA - Momentum since earnings announced.
NVCR - Price target increases from analysts. Clinical trial news.
KC - Analyst upgrades
PRCH - 3LYNCH, decent earnings last month too so delayed reaction. Volume surge
HIMX - 3LYNCH, decent earnings last month too so delayed reaction. Volume surge
PPTA - more than 3x volume surge
HSAI - poor earnings but still volume surge week before. News of Lidar units
TELO - confirmed efficacy of study for diabetes
QURE - Analyst upgrades + looks like good 3LYNCH setup too
ROKU - Analyst opinions, 3LYNCH setup. Volume surge
SOUN - Insider trading. Momentum stock, had good earnings last month.
AUR - good setup, 3LYNCH
FSLY - good setup, 3LYNCH. Insider trading. Helped by competitor filing from bankruptcy protection.
QBTS - decent earnings week before. Volume surge.
GRPN - good earnings last month. 3LYNCH setup.
PSTG - earnings gap up
NNOX - news: FDA expanded clearance for its flagship medical device
DNA - 3LYNCH on the back of good earnings last month
SMCI - No evidence of fraud, catalyst news prompts recovery
VSCO - 3LYNCH and good earnings
SERV - 3LYNCH, Volume surge 3x
ASAN - Good earnings, analyst opinions. Massive volume surge
SFHG - IPO, hard to gauge but 3LYNCH
BTDR - price target change
NCTY - 3LYNCH
ZJK - IPO, hard to gauge
CRDO - Gap up after good earnings and volume surge
NBIS - IPO, hard to gauge
KROS - News - blood cancer drug license deal with Takeda
DOCU - Good earnings and volume surge but then declined due to bank downgrade
LULU - decent earnings and analyst price increase
Risk contact me for your prize
CTRN : I would have entered on 22nd NOV when the stock consolidated for the first time following a fall from a VCP kinda base on 6 NOV. This is still a momentum stock after locking in 80% gains in 4 months, most of the retail hands are out of it and not thinking about it especially after the big red bar on 14 NOV. The gap up following 3 tight bars on 22Nov is my go to signal to jump in the trade with SL being the low of previous day bar. My first profit taking would be at 19.95 (20 being a big round number) and trailing the rest with my buy point at 18.36, 2nd exit at 24.9 and last 1/3 to trail till eternity unless it falls below day 1 buy point.
ROKU is similar to CTRN, the stock is in momentum after locking in 80% gains, falling on 31 st Oct removing all the retailers and forming a higher low followed by tight consolidation, gap up following 2 tight bars on 29 NOV is the entry point, with first profit at 79.9 and next at 84.9, followed by trailing the last 1/3 to day 1 buying point on 29 Nov
GCO is a gap and go trade from a big base breakout but I would have entered it following a 4 bar consolidation after the gap up and entered it on 3rd December just before closing time, the stop being the low of the entry bar.
KROS would have missed KROS as would have loved to have same 2-3 bar consolidation as in CTRN, would have been pretty much intrested in the stock on 29 NOV but would have waited for 2-3 days before attempting breakout, hence another miss for me.
Post a Comment