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Perfect Buy Points: IPO’s – The Primary BaseJS-Masterclass #8: Perfect Buy Points: IPO’s – The Primary Base When it comes to investing in IPO stocks, new issues don't play by the usual rules. Companies making initial public offerings draw a lot of investor attention. That often results in unusual and brand-new chart patterns. Volatility can rise as investors size up demand for the new stock. Yet there are opportunities in these cases, if you can spot the correct characteristics amid the price-and-volume action. The framework of a good IPO base is simple. The decline from peak to low usually doesn't top 20%, but the most volatile markets have produced declines of up to 50%. The length is often less than five weeks and can be as short as seven days. These two factors alone make IPO bases wayward cousins compared with proper bases, such as the cup with handle and flat base, which need at least five to seven weeks of work. In an IPO base, the pattern typically starts within 25 days of the stock's first day of trading. Know the important similarities with regular bases. For example, the buy point is drawn by taking the prior high and adding 10 cents. The price gain on the breakout should be strong. There are ways to evaluate these blind spots, however. Important factors include seeing a shallow correction within the base during normal market conditions, a large increase in price and a close near session highs on the breakout day, and heavy volume on the breakout day and week. Also, the stock should generally form the base above its IPO price. Example - ServiceNow (NOW) The business software company, went public in June 2012, at 18 a share and has built its primary base during the period from the initial offering to April 2013 when the stock developed its first perfect buy point.
NYSE:NOWEducation
by JS_TechTrading
How to Pick the next Winners? CAN-SLIMA successful trading strategy starts with sound stock selection criteria. Our JS-TechTrading strategy combines the timeless and success proven principles of Mark Minervini's SEPA (R) analysis and William O'Neils' CAN-SLIM (R) methodology. This tutorial describes the CAN-SLIM (R) methodology in detail: CAN-SLIM refers to the acronym developed by the American stock research and education company Investor's Business Daily (IBD). IBD claims CAN-SLIM represents the seven characteristics that top-performing stocks often share before making their biggest price gains. It was developed in the 1950s by Investor's Business Daily founder William O'Neil. The method was named the top-performing investment strategy from 1998-2009 by the American Association of Individual Investors. CAN-SLIM is a growth stock investing strategy formulated from a study of stock market winners dating back to 1953 in the book How to Make Money in Stocks: A Winning System In Good Times or Bad. This strategy involves implementation of both technical analysis and fundamental analysis. The objective of the strategy is to discover leading stocks before they make major price advances. These pre-advance periods are "buy points" for stocks as they emerge from price consolidation areas (or "bases"), most often in the form of a "cup-with-handle" chart pattern, of at least 7 weeks on weekly price charts. The strategy is one that strongly encourages cutting all losses at no more than 7% or 8% below the buy point, with no exceptions, to minimize losses and to preserve gains. It is stated in the book, that buying stocks of solid companies should generally lessen chances of having to cut losses, since a strong company (good current quarterly earnings-per-share growth, annual growth rate, and other strong fundamentals) will usually shoot up—in bull markets—rather than descend. Some investors have criticized the strategy when they didn't use the stop-loss criterion; O'Neil has replied that you have to use the whole strategy and not just the parts you like. O'Neil has stated that the CANSLIM strategy is not momentum investing, but that the system identifies companies with strong fundamentals—big sales and earnings increases which is a result of unique new products or services—and encourages buying their stock when they emerge from price consolidation periods (or "bases") and before they advance dramatically in price. The seven parts of the acronym are as follows: 1. C stands for Current quarterly earnings. Per share, current earnings should be up at least 25% in the most recent financial quarter, compared to the same quarter the previous year. Additionally, if earnings are accelerating in recent quarters, this is a positive prognostic sign. 2. A stands for Annual earnings growth, which should be up 25% or more over the last three years. Annual returns on equity should be 17% or more 3. N stands for New product or service, which refers to the idea that a company should have continuing development and innovation. This is what allows the stock to emerge from a proper chart pattern and achieve a new price. A notable example of this is Apple's iPhone. 4. S stands for Supply and demand. A gauge of a stock's demand can be seen in the trading volume of the stock, particularly during price increases. 5. L stands for Leader or laggard? O'Neil suggests buying "the leading stock in a leading industry." This somewhat qualitative measurement can be more objectively measured by the Relative Price Strength Rating of the stock, designed to measure the price performance of a stock over the past 12 months in comparison to the rest of the market based on the S&P 500 (or the S&P/TSX Composite Index for Canadian stock listings) over a set period of time. 6. I stands for Institutional sponsorship, which refers to the ownership of the stock by mutual funds, banks and other large institutions, particularly in recent quarters. A quantitative measure here is the Accumulation/Distribution Rating, which is a gauge of institutional activity in a particular stock. 7. M stands for Market Direction, which is categorized into three - Market in Confirmed Uptrend, Market Uptrend Under Pressure, and Market in Correction. The S&P 500 and NASDAQ are studied to determine the market direction. During the time of investment, O'Neil prefers investing during times of definite uptrends of these indexes, as three out of four stocks tend to follow the general market direction.
Education
by JS_TechTrading
US TOP-Stocks: Watchlist Update Nov 1Stock Market Slightly Pulls Back Ahead Of Fed Meeting The stock market took a step back Monday ahead of the start of the two-day Federal Reserve meeting. But it wasn't such a bad session for the bulls because it was an orderly decline for the stock indexes, and volume wasn't overwhelming to the downside. Sentiment was negative in the stock market as the U.S. dollar strengthened. The Fed on Wednesday is widely expected to raise the federal funds rate by 75 basis points again to a range of 3.75% to 4%. Until then, caution is advised as volatility is expected to be high. If the confirmed uptrend has staying power, new leaders and setups will continue to emerge. Keep your eyes focused on our watchlists and look for opportunities to increase exposure. Updated Watchlist All stocks on our watchlists meet the hard selection criteria according to Mark Minervini's Trend-Template and William o' Neil's CAN SLIM methodology. Hereis the link to the updated watchlist: www.tradingview.com
Long
by JS_TechTrading
JS-Masterclass #6: The Perfect Buy PointThe Perfect Buy Point A Perfect Buy Point represents the completion of a stock’s consolidation and the potential start of its next advance. After a base pattern has been established, the Perfect Buy Point is where the stock establishes a price level that will act as the trigger to enter a trade. When a stock’s price level moves through the Perfect Buy Point, there is a high probability that this represents the start of the next advancing phase. You can also call the Perfect Buy Point a “call to action” price level – it is the optimal buy point. In the context of a stock’s Volatility Contraction Pattern, a temporary pause (also called a base building process) allows you to set a buy stop to enter a trade. You want to buy as close to thePerfect Buy Point as possible without chasing the stock up more than 1.0%. In this context, the use of buy stop limit orders is recommended. As a solid consolidation process and the formation of a Volatility Contraction Pattern are needed before a Perfect Buy Point can occur, The Perfect Buy Point can also be considered as the line of least resistance. A stock can move very fast once it crosses this threshold. When a stock breaks through the line of least resistance, the probability is high that the price level will move much higher in a short period of time. This is the case because this represents an area where supply is low. Therefore, even a small amount of demand can move the stock higher. The importance of the Volume at the perfect Buy Point A Volatility Contraction Pattern is needed before a Perfect Buy Point can develop. As explained earlier, supply will stop coming to market at the ed of a valid Volatility Contraction Pattern. This is why we want to see the Volume significantly come down in the day or the couple of days before the Perfect Buy Point develops. Now, with only very little supply of stock in the market from sellers, even a small amount of buying can move the price up very rapidly as the price level moves through the Perfect Buy Point. In the ideal case, this move through the perfect Buy Point occurs under heavily increasing volume. This might be an indication that big institutions are putting their big money into the stock. When all of this comes together, you want to place the order as close to the Perfect Buy Point as possible. Always wait for the price level to move through the Perfect buy Point! Some traders will try to get in before the breach of the pivot point to save a few pennies on the trade. Assuming that a stock will break out is dangerous and the breakout may fail. Be patient! Remember Even if you respect all these technical requirements of a Perfect Buy Point, you will still get stopped out and incur losses. BUT: Trading is all about probabilities…respecting these rules will increase your probability to enter profitable trades and significantly outperform other traders and increase your chances to be consistently profitable in the market.
Education
by JS_TechTrading
2
Volatility Contraction PatternJS-Masterclass #4: The Volatility Contraction Pattern The Volatility Contraction Pattern (VCP) is a vital concept for successful traders and a key element in our JS-TechTrading strategy. In this tutorial, we will cover the following: 1. Why is it important? 2. The ‘Overhead Supply’ Concept 3. How to identify a VCP? 4. The Perfect Entry Point 1. Why is it important? The Volatility Contraction Pattern (VCP) allows us to find stocks which are getting ready to form a very specific low risk entry point at which the potential reward of our trades outweigh the risk. The main role that VCP plays is establishing a precise entry point at the line of least resistance. If a stock is under accumulation (large institutions putting their money into the stock), a price consolidation represents a period when strong investors ultimately absorb weak traders. Once the “weak hands” have been eliminated, the lack of ‘overhead supply’ (explanation see below) allows the stock to quickly move higher because even a small amount of demand will overwhelm the negligible inventory. This is referred to as the line of least resistance. Tightness in price from absolute highs to lows and tight closes with little change in price from one day to the next and also from one week to the next can generally found in constructive Volatility Contraction Patterns. These tight areas should be accompanied by a significant decrease in trading volume. 2. The ‘Overhead Supply’ Concept Any price action in the stock market is the simple result of supply and demand, just like in any other business. If demand is bigger than the supply, the price goes up. If supply outweighs demand, prices are falling, it is as simple as that! What happens to supply and demand in a Volatility Contraction Pattern? Point 1: Traders buying at point 1 in the graphic are called ‘Trapped Buyers (TBs)’. Point 2: the price has fallen and many people think the stock is ‘cheap’ at this price and buy the stock – the so called ‘Bottom Fishers (BFs)’ provide the relevant demand needed to trigger a price increase. Point 3: the price has come back up to the level at point 1. Now two things happen a) The Trapped Buyers who bought a price level 1 are very happy to get out of the trade at breakeven after having had paper losses at point 2. The cut their losses (LC) and provide the relevant supply to the market needed to trigger a declining price. b) The Bottom Fishers take nice quick profits and sell their stocks, providing additional supply to the market which adds to the decline in price. Points 4, 5, 6: The same concept applies here but as time goes by, the volatility contracts from left to right as fewer and fewer traders provide their demand and supply to the market, the price action dries out like a towel: 3. How to identify a VCP? A common characteristic of virtually all constructive price structures (those under accumulation) is a contraction of volatility, from greater volatility on the left side of the price base to lesser volatility on the right side in the chart. This pattern needs to be accompanied by specific areas in the base structure where volume contracts significantly: Let’s look at an example: In this example, we are seeing a total of 5 contractions from left to right, starting from 1 (ca. 25% decline) to 5 (< 5% decline) under significantly reduced trading volume. This is exactly what we want to see. At the final base 5, supply has stopped coming to market which is the reason for the low trading volume in this time-period. Due to the lack of supply, only very few demand is needed to push the price significantly higher. We therefore have a high probability of an explosive price increase. Also, we can set our SL just below the final base at 5 which means that our max. risk for this trade is < 5% - our potential reward significantly outweighs our risk. 4. The Perfect Entry Point When the price breaks out of the right side of the final base under higher volume, we have a perfect entry point. As the supply has stopped coming to market, only little demand is needed to cause an explosive price move upwards. Furthermore, the volatility contraction results in a tight base at the right end of the pattern resulting in a low risk entry point – the Stop-Loss can be set under the low of the latest base structure on the right side of the pattern which is normally in the range of about 5% risk. This is a vital concept for successfully timing the continuation of an existing trend.
Education
by JS_TechTrading
2
US TOP-Stocks: Watchlist Oct 28General Market Update Tech Stocks Continue To Slide After Meta Meltdown The stock market ended sharply mixed Thursday, as the Dow Jones Industrial Average finished with moderate gains. The tech-heavy Nasdaq composite sold off, as tech giant Meta Platforms (META) crumbled on weaker-than-expected earnings results. Amazon (AMZN) and Apple (AAPL) reported earnings late Thursday. Amazon shares dived almost 20% in extended trade, while Apple stock fell about 1%. Nasdaq 100 futures were sharply lower in response. Stock Market Rally Struggles After two straight days of heavy selling on the Nasdaq, the young stock market uptrend is clearly struggling to gain traction. The market is still in a confirmed uptrend, so investors have the green light to buy strong breakouts. However, given the precarious action seen in recent sessions, and after a few failed follow-through days earlier this year, it's logical to keep exposure limited to 20% to 40% of a portfolio until the overall stock market environment improves. We continue to track companies that handily beat earnings results and have strong upside reactions and could be the leader of the next bull market. Updated Watchlist All stocks on our watchlists meet the hard selection criteria according to Mark Minervini's Trend-Template and William o' Neil's CAN SLIM methodology. Here is the link to the updated watchlist: www.tradingview.com
Long
by JS_TechTrading
JS-Masterclass #3: FundamentalsIn the recent tutorial 'Trading with the Trend - Stage Analysis', we have explained the importance of identifying stocks in a confirmed stage 2 uptrend using the 'Trend-Template'. What are the Fundamentals doing in a confirmed stage 2 Uptrend? The best stocks and buying opportunities available in the market meet the technical requirements according to Minervini's Trend-Template and have very healthy Fundamentals. Best Candidates - Growth - Accelerating EPS and Revenues - Explosive Market Position - Sustainable Trends - Scalable Business Model Worst Candidates - Capital Intensive - Limited Pricing Power - Heavily Regulated - Margin Pressure - Eroding Industry Position Watch out for these 3 key fundamentals – Earnings, Sales and Margins 1) Earnings in most recent 2-3 quarters +20% or more – the bigger the better; look for earnings acceleration – quarter to quarter sequential. Look at a 2 quarter average (up 20%) 2) Sales acceleration: sales increasing in most recent 2-3 quarters 3) Check profit margins – are they expanding or contracting? 4) Combination of sales and margins = earnings: gauge current growth versus 3-5 year growth rate (look for acceleration), Look for a breakout year How Do You Know if an Earnings Report is Really Great? 1. Results are better than the consensus of analysts’ estimates or, even better, earnings come in above the highest analyst estimate. Why? This will get the stock on the radar screens of big institutions. 2. The company raises its guidance for the upcoming quarter and the fiscal year significantly. 3. The stock price reacts positively to the earnings report and/or company issued guidance and resists meaningful profit taking over a number of days or weeks. 4. Analysts promptly raise estimates. (More than a 5% change from 30-days earlier is meaningful). 5. Revenue is reported above the consensus estimate (preferably above the highest estimate) and is also revised upward. 6. Earnings are “quality” – profit improvement comes from increased sales as opposed to a one-time gain or non-operating/non-recurring income. Keep in mind, cost cutting or “productivity enhancements” have a limited life span. 7. You can check Return on Equity to get an idea how good management is doing. You should compare this number to other companies in the same industry. 15-17% is a good cutoff for most stocks. Red Flags • Material earnings deceleration is a warning • Eroding margins is a warning • Positive earnings with negative sales – limited life span • A company showing strong earnings but not paying much in taxes is a red flag Even if you have found a stock with great Fundamentals: - Never trust the story - Never trust the numbers - Unless confirmed by price action
Editors' picks
Education
by JS_TechTrading
6
US TOP-Stocks: Watchlist Oct 27General Market Update Megacap Techs Sink Nasdaq On Mixed Day Wednesday turned in one of the most lopsided performances among the major indexes in quite a while. X The headlines-making Nasdaq composite index sank 2%, halting a three-day rally. This index is market-cap weighted, put another way, what the 10 biggest companies do has tremendous sway every trading day over the premier index for growth companies. The top three companies alone, including Microsoft (MSFT), which tanked 7.7% in massive turnover Wednesday, grab more than a quarter of the Nasdaq's valuation. Microsoft fell fiscal Q1 results that marked further deceleration. Small and midcap stocks, meanwhile, also did better than the names that once were fondly known as the FAANG firms. The Russell 2000 rose almost 0.5%. SPDR S&P Mid Cap 400 closed nearly 0.3% higher. Breadth turned out bullish on the session yesterday On the Nasdaq, winning stocks outpaced losers by about 800 issues which is an overall bullish indication which may confirm a new uptrend being underway. Updated Watchlist All stocks on our watchlists meet the hard selection criteria according to Mark Minervini's Trend-Template and William o' Neil's CAN SLIM methodology. Here is the link to the updated watchlist: www.tradingview.com
Long
by JS_TechTrading
Mark Minervini's Trend-TemplateIn the last tutorial, we have highlighted the importance to look for stocks in a confirmed stage 2 uptrend and explained why. But how can we use technical chart analysis can be used to identify stocks in a stage 2 uptrend? US investment champion Mark Minervini developed the so-called Trend-Template which can be used to screen for stocks in a confirmed stage 2 uptrend. TradingView provides all of the relevant tools to automate this screening process. The following section summarizes the technical characteristics which must be met so that a stage 2 uptrend for a stock can be confirmed: Trend-Template to confirm a STAGE 2 Uptrend 1. Stock price is above both the 150-day (30-week) and the 200-day (40-week) moving average price lines. 2. The 150-day moving average is above the 200-day moving average. 3. The 200-day moving average line is trending up for at least 1-month (preferably 4-5 months minimum). 4. The 50-day (10-week moving average) is above both the 150-day and the 200-day moving averages. 5. The current stock price is at least 25% above its 52-week low. (Many of the best selections will be 100%, 300% or even greater above their 52-week low before they emerge from a sound consolidation period and mount a large-scale advance). 6. The current stock price is within at least 25% of its 52-week high (the closer to a new high the better). 7. The relative strength ranking (as reported in Investor’s Business Daily) is no less than 70, but preferably in the 90s, which will generally be the case with the better selections. 8. Current price is trading above the 50-day moving average (exception “Low Cheat” setups Remark for 7: the relative strength ranking as reported by IBD is only accessible for IBD embers but the TradingView indicator 'Relative Strength (IBD Style)' by SKYTE can be used as an alternative. We at JS-TechTrading only consider stocks for our watchlists which are meeting all characteristics of Minervini's trend-template. Additionally, we are screening stocks for solid fundamentals using William o' Neils' CAN-SLIM methodology. This screening process in itself provides us with a significant competitive edge versus most other traders are doing.
Education
by JS_TechTrading
2
Trading with the Trend - Stage AnalysisThe trend is your friend. This is a very old but true quote. Why is that? • 98% of big winning stock made the largest portion in their gain in a Stage 2 uptrend • Evidence that institutions are buying • Increase probability of success • Know what to expect under specific conditions – point of reference Your goal is not to buy at the lowest price – It’s to buy at the right price! Every stock goes through the same stock maturation cycle - it starts at stage 1 and ends at stage 4 as shown in the chart. Stage One – Neglect Phase – Consolidation Stage Two – Advancing Phase – Accumulation Stage Three – Topping Phase – Distribution Stage Four – Declining Phase – Capitulation Our JS-TechTrading strategy focuses on identifying stocks in stage 2 uptrends. By doing that, we create an edge over long-term investors and less proficient traders. By focusing on stocks in a stage 2 uptrend, we avoid losing money or breaking even over a long period of time and we are fully invested when stocks are in their stage 2 uptrends so that we can accumulate money within the shortest period of time.
Education
by JS_TechTrading
US TOP-Stocks: WatchlistGeneral Market Update The stock market uptrend continued to gain traction Tuesday as major stock indexes notched their third-straight bullish session. The Nasdaq composite rose above the 11,000 level with ease, ending with a gain of 2.2%. Nasdaq volume rose, completing a second follow-through day for the index. Advancing stocks outnumbered decliners on the Nasdaq by nearly 4-to-1. The strongest outperformance came from small cap and midcap stocks. The iShares Russell 2000 ETF (IWM) ramped higher by 2.7%, helped by strong earnings reports and huge gains for Medpace (MEDP) and Calix (CALX). The small-cap ETF briefly crossed above its 50-day moving average but ended just below the line. The SPDR S&P MidCap 400 ETF (MDY) jumped 2.5% and closed just above its 50-day line. The S&P 500 marched ahead 1.6%, bringing its three-session gain to 5.2%. Preliminary data showed volume very close to Monday's level. The S&P 500 is getting closer to a rendezvous with its 50-day line, a potential resistance level to watch. If the index pauses and consolidates below this level for a short time, it wouldn't be such a bad thing. Price action like this could pave the way for a convincing retaking of the line. NYSE advancers beat decliners by just over 5-to-1. The number of technical breakouts and bullish setups has been rising, helped by a market tide that is flowing positive once again. Increasing market exposure is fine, but pay attention to the ticker tape's feedback when it comes to new buys. Are they making progress past proper entries? If so, that should make you feel good about increasing exposure. Updated Watchlist All stocks on our watchlists meet the hard selection criteria according to Mark Minervini's Trend-Template and William o' Neil's CAN SLIM methodology. Here is the link to the updated watchlist: www.tradingview.com
Long
by JS_TechTrading
5
HOW-TO [TTI] Minervini MonAlertHOW-TO instruction This video shows how my custom MonAlerty indicator works for TradingView that evaluates Post-Buy signals. I am very excited about building this for you since it has made a massive impact in my trading. In this video you will see: 👉 How to add the indicator 👉 What are the customisable settings 👉 How the Pop up function works 👉 How you can print the signals on the chart Detailed explanation of the calculations are in the script publication
SEducation
by TintinTrading
3
US TOP-Stocks: WatchlistGeneral Market Update After the Nasdaq composite and S&P 500 made follow-through rally confirmations Friday, the stock market extended gains Monday. In the initial hours, performance was uneven. The Nasdaq composite and small caps lagged the S&P 500 and Dow Jones Industrial Average. But the Nasdaq composed itself in afternoon trading and closed almost 0.9% higher. The S&P 500 and Dow led with gains of 1.2% and 1.3%. The Russell 2000 rose less than 0.4% as small caps never caught up with the rest of the market. Volume rose 2% vs. Friday's session on the Nasdaq and was indicated lower on the NYSE. Friday's follow-through — when the S&P and Nasdaq surged more than 2% each in higher volume — marked the start of a confirmed market uptrend. But while the signal is historically bullish, today's market calls for greater safeguards. Reasons For Stock Market Caution Three follow-throughs that occurred earlier this year all failed, as they often do in bear markets. And today's stock market still faces major risks. The Fed, for one, is still looking for clear signs that inflation is cooling off before it cuts back on rate hikes. Scores of earnings reports are coming out this week, including many bellwether companies. Updated Watchlist All stocks on our watchlists meet the hard selection criteria according to Mark Minervini's Trend-Template and William o' Neil's CAN SLIM methodology. Here is the link to the updated watchlist: www.tradingview.com
BLACKBULL:SPX500Long
by JS_TechTrading
Leading US Stocks outperform IndicesThe stock market wavered on Tuesday as the post-Fed rally ran out of steam, although small caps and leading stocks performed better than most major indices. A mix of consumer, energy and health care leaders helped the index rise more than 1%, driven by a handful of outsize gains. Pockets of strength in software, chip, biotech, solar and internet stocks helped the Nasdaq limit its loss to 0.2%. The S&P technology sector was down 0.7% overall. The Dow Jones Industrial Average lagged with a 1.2% drop. Earnings and Fed News Influence Stock Market Tuesday's stock market wrestled with earnings reports, economic data, remarks from Fed officials and political strife. The stock market also dealt with geopolitical risk, this time in the Far East. House Speaker Nancy Pelosi's diplomatic visit to Taiwan angered Chinese leaders. Beijing, which had warned of consequences if Pelosi went ahead with her trip, sent warplanes over the Taiwan Strait and launched live-fire naval exercises. WHAT NOW? The overall market environment for breakout traders remains bullish, although we are not yet out of the woods. Bottoming after a bear market is a process which can take significant time. Breakout / swing-traders should be invested by ca. 50% by now but continue to remain highly cautious. Only increase your exposure on the back of gains in your own portfolio and always stick to your stop losses. Here is the link to our updated watchlist: www.tradingview.com
AMEX:SPYLong
by JS_TechTrading
US Stocks: Improved Technical ActionThe futures of the major US indices fell modestly early Monday morning. The stock market rally passed an inflection point last week, making a decisive move higher. Investors should be adding to their positions with careful buys, not rushing to ramp up exposure. Markets are showing solid and improving technical action, but also appear to be betting on an optimistic economic scenario. Here is the link to our updated watchlist for the US tock market: www.tradingview.com Watch out for the sectors Solar, Energies, Health & Technologies and Consumer Services which all show improved relative group strength. All Stocks on our watchlist are absolute top picks and fulfill Minervini's Trend-Template criteria and are selected using IBD's CAN SLIM criteria. Also, they all have low risk entry points.
DJ:DJILong
by JS_TechTrading
New Bull Market Ahead ???The bulls were definitely dominating the stock market last week. And while it may be too early to celebrate and give it an all clear for breakout-traders, the fact that the market passed some key tests is worthy of increased optimism. Investors should still nimble. With the stock market having its best month since 2020, it would not be unusual for it to digest some gains. We also remain in the midst of earnings season. As always, apply the concept of progressive exposure and only increase risk and your personal exposure on the back of traction and gains in your own portfolio. Here is the link to our updated JS-TechTrading Risk Model: Almost all technical indicators look good and the psychological / contrarian indicators in our risk model also suggest that the market may have bottomed already. WHAT NOW? By now, breakout traders / swing-traders should be invested by ca. 50%. Only increase exposure on the back of your personal wins. If stocks are working for you, get more aggressive.
AMEX:SPYLong
by JS_TechTrading
1
Stock Market Rallies As GDP Triggers RecessionThe stock market extended gains yesterday, in parallel the US economy officially entered a recession based on the commonly accepted definition. Amazon.com (AMZN) and Apple (AAPL) reported their quarterly results after the close and added to the market's gains: Amazon up 12% , Apple up 4%. Stock market futures conitnue to rally as well. The 10-year Treasury yield ticked down to 2.68%, closing at its lowest level since early April. Stock Market The stock market uptrend shrugged off the recession signal, as the Dow Jones Industrial Average and S&P 500 gained 1% and 1.2%, respectively. The tech-heavy Nasdaq rallied 1.1%. The small-cap Russell 2000 advanced 1.3%. While recession could slow earnings, it appears that most of the negative news are already discounted and priced into the stock market. Our JS-TechTrading model portfolio had a great week which is confirmed by volume-proce action bymany leading stocks as well as the major market indices. What does that mean for swing-traders? Swing-traders have the green light to boost their exposure to stocks, focusing on those breaking out past correct buy points. Gradually commit capital to leading stocks. Still, it's not time to be overly aggressive as we potentially could have another leg down in the general market. Here is the link to our updated watchlist: www.tradingview.com Watch out for health and technology stock. Industry group ratings suggest that those could be the leaders in the next bull market cycle. All Stocks on our watchlist are absolute top picks and fulfill Minervini's Trend-Template criteria and are selected using IBD's CAN SLIM criteria. Also, they all have low risk entry points.
AMEX:SPYLong
by JS_TechTrading
US Swing-Trading: Best STOCKS to buyAll Stocks on our watchlist are absolute top picks and fulfill Minervini's Trend-Template criteria and are selected using IBD's CAN SLIM criteria. Also, they all have low risk entry points. www.tradingview.com Featuring a few stocks: PBH With its next quarterly earnings report set for around Aug. 4, Prestige Brands (PBH) is trading approximately 10% shy of its all time highs. The stocks built a low risk entry in this range which we would call a cup with low-handle pattern. Swing-Traders can build a first smaller position in this range and then add to the position as the stock enters new all time highs. The entry is based on a first-stage consolidation. Understand that buying a stock just ahead of earnings involves risk since you typically don't have enough time to build a profit cushion before the latest quarterly numbers come out. Be sure to follow sound buy and sell rules to minimize your exposure. Prestige Brands reported 15% EPS growth in its most recent report. Sales gains came in at 12%. Analysts are looking for earnings growth of -8% for the quarter, and 3% growth for the full year. Annual growth estimates were recently revised lower. MCK Mckesson (MCK) is forming a base offering a 340.04 buy point with its next quarterly report expected on Aug. 3. The entry is based on a second-stage flat base. Keep in mind that jumping into a stock right as it gets ready to report means you likely won't have enough time to build a profit cushion before the release. That leaves you exposed to a sudden downturn if the company disappoints investors with poor numbers and/or weak guidance. You can reduce your exposure by waiting to see the actual numbers and the market's reaction. Using an options strategy during earnings season is another way to put yourself in a position to profit, while minimizing the potential downside. Earnings growth dropped last quarter from 34% to 15%. But revenue moved higher, from 10% to 12%. Consensus analyst estimates call for EPS growth of -5% for the quarter, and an -1% gain for the full year. The company has a 97 Composite Rating and holds the No. 1 rank among its peers in the Medical-Wholesale Drugs industry group. Amerisourcebergen (ABC) and Cardinal Health (CAH) are also among the group's highest-rated stocks.
NYSE:PBHLong
by JS_TechTrading