From Near Pivot to Breakout

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As traders always looking for the next move we try to have access to as many tools as we can and today we’re going to share with you one of our favorite ways of using MarketSmith:

Launch MarketSmith 

Go to Stock Ideas on top and a box appears with Reports, Screens, Market Analysis.   Under Reports go to Near Pivot, hit View

 

 

Once you do that the bottom field populates with  stocks that are below breakout, listing the pattern and other pertinent information.

This is how we found PYPL, which now is under actual Breakout list.    We try to stay as close as possible to the base and like to have stocks on our watch-list before breakouts. Why?

1) by watching them for days before breakout you become familiar with their behavior.

2)  a lot of time the intraday pattern for entry is actually before the breakout (remember BABA) while at the breakout point you have shenanigans that often stop traders out.  We’d rather be in a few points under relaxing with a profit cushion and watch the fireworks at breakout points.    Caveat here — the anticipation trade works very well in strong bullish tapes like the one we are enjoying, not so much in neutral/range bound tapes.

See you on the streams. HCPG

 

 

Sector moves, Best moves.

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If you ask a bunch of traders what is the most successful type of move you see in tape more often than not they will tell you “sector moves”.  That’s when you go in more aggressively — they don’t come that often, but when they do, you have to take advantage.

NTNX first made our newsletter on June 06 (and then stayed on watch-list until breakout today) when we were looking through our MarketSmith scans.    We were looking at BZUN, then decided to take a look at the sector it belonged to, and then found NTNX.   Working backwards from BZUN (which had already broken out) to find next move in NTNX (which broke out today).

NTNX chart, a beauty on daily and weekly.

There is no 100% successful trade/formula. But sector moves come close.  Use that to your advantage when you find leader stock moves.

And then our favorite – the anticipation to the breakout which statistically for us has more chance of working than actual breakout (even though breakout of course can garner more points when it works — different types of trades).   We like to be early in these moves — base breakout here near 58.50 (posted on StockTwits 58.64 — currently up 3%) and then actually start selling daytrade portion into breakout.  Swing portion we will keep unless it closes under 59.

Trading is tough and you have to work hard to always find that extra edge in strategy.  It never stops.   Hope that helps. See you on the streams.   HCPG

All stocks are equal but some are more equal than others

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One of the few advantages we have over computers is that we can get to know the “personality” of our stocks.  There are some stocks, like BABA NVDA, where we have much more confidence in reading the script than in random stocks we see for first time but with good patterns. This doesn’t mean you shouldn’t be open to other stocks– add them to watch-list, get to know them, and see if they behave well.

We have a lot of focus on very few stocks and that gives us the psychological edge to strike when the time comes.    All of our swings have been in these blogs and StockTwits now for weeks/months.    All stocks are equal, but some are more equal than others.  Indeed.

As a bonus when we see  MarketSmith is showing a pattern recognition buy alert on our swings we feel an extra edge of confidence.  Let’s review our current swings:

GRUB from 103– we only have 1/3 left here and trailing stop (currently 106).  Keep waiting to get stopped out on this one but it keeps trucking along.

BABA we posted mercilessly since April in the blog, StockTwits, and even earlier in our newsletter.    Pattern was perfect, but it stalled and didn’t go. When that happened more and more people caught on the pattern and it became crowded. It tried to go last Monday and failed, but finally went on Friday.   Crowded trades often fail the first time, don’t delete from watch-list!  Wait until fewer eyes on it and then it has a higher chance of going (Monday vs Friday in the case of BABA)

200 Breakout — we had this from 184 and closed the trade as it hit trailing stop.  Got in again for the secondary breakout.   NVDA BABA are best trading stocks for 2018 for our accounts.

 

Again note MarketSmith also has buy pattern in it — love that.

FB 180 yet another stock we posted mercilessly in newsletter until it went — up 8% in it and have 1/3 left.   Sitting tight on last 1/3, anticipating the big breakout into new highs.

NVDA our favorite trade right now with the support reversal on 240.  Again, another newsletter favorite.   Note also MarketSmith has a buy on it — fantastic.

Our entry was 243 against 240 reversal with stop on that day’s lows.   Up 9% on it.

SMH our longest holding against 50sma weekly and up over 11% on it — we love being long semis in bull tech tapes as they are often the engine of the market.

 

Things have dried up this week — we have 5 swings, but we’re always looking for more candidates.    Every night we go through  MarketSmith scans, especially Near Pivot, looking for more ideas.  Always be hungry, especially in a tape such as this one which is a gift.

 

See you on the streams. HCPG

IBD 50 standouts

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Love the quiet early Sunday mornings before the family wakes up: Start up the computer, make a hot cup of coffee, and open up MarketSmith to look through scans for the week.   The first scan we go through is the IBD 50.

To become a consistent trader you have to learn to strike when a decent amount of balls line up (having every ball line up conversely can be a negative, but that’s another post).    One of the balls is IBD.   When our stock is in the IBD 50 — it gives it that extra level of confidence, and trust us, at this stage of the game (once you have the trade managment down) it’s all psychology.

We’re usually very early in our stalking and holding — here we are already in $BABA and $NFLX and you would think it was this week, but it was posted May 04. 

If a stock has decent potential but it’s not ready, we add it to watch-list. Ideally, we like to add early and then watch it for days before actually entering.  Why? Because you get to know the stock behavior — and we can’t emphasize how important that is to a trader.   To a certain extent you get to know the personality of the stock, how to treat the stop, whether to wait for breakout or get in early for anticipation — this is the small advantage we still have over computers.

Let’s go over 7 of our favorites in the 50:

First a  visual glimpse of how MarketSmith actually works —  relevant scans for any type of trader, but especially momentum traders like ourselves, and trading ideas and alerts.   We like to go through the Near Pivot list to take a look at stocks before any potential breakouts.

1. Momentum trader dream here — look at all those beautiful scans on the left to choose from.

 

2.  Automated recommendations  on entry, stop, and target.  BZUN a good example here up already 11% from pivot (red highlight is stop, blue is buy zone, green is target).   We also came up with BZUN in our HCPG scans — always good to get the IBD nod.  Again, balls lining up.

BZUN IBD #3

GRUB daily down from buy spot but weekly looks strong.  Keep on watch-list.  GRUB is IBD #4

 

NFLX we are swing long — what a rock star this stock is.    NFLX also IBD #14 and has already triggered their pattern recognition/alert.

NVDA we area long on 240 reversal (which was also bottom of buy zone on MarketSmith).   NVDA also IBD #21

MA is IBD #31 — great daily, and look at that beautiful hold on 20sma on Friday. Wish we had seen that in real-time.

 

VEEV is IBD #39 and also in the buy zone.   Great chart.

 

SGH another chart that looks good and IBD #42.

 

Should be interesting week.  We come in with month long swings on SMH  and  then some positions in NFLX BABA NVDA FB.   SPY has broken the sweet spot trend meaning we have lost that confidence in buying dip against the upper Dev 1 edge.    The range is small but important.  270-274.   Next time through 270 or 274 should finally break out of this 12 day range.

See you out there on the streams!

 

Deja Vu Chinese flufferbots

We’ve seen this movie before — attention to Chinese IPO type runners while market itself feels fatigued.   Banks and Semis ran today but they couldn’t get the market green.   Feels like a summer tape before the long weekend.    We’re a bit more cautious today — but still long.   SPY 270 goes though and things might get more volatile again.  For now though market in sweet spot, and IWM still leading.

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We wanted to take a quick look at  Chinese IPOs — opened up our MarketSmith (highly recommend a trial here)  and it took all of 1 minute to get out a filter, plugging in Chinese IPO — sorted by price:

This type of market is actually not our forte — we like bigger cap momentum stocks rather than these Chinese fluffer bots, but there are some good moves to be caught, like in IQ today which was trending on StockTwits as traders were hungry for anything that was moving.

 

IQ probably the best of the IPO bunch.

HUYA has some potential — we’d trade it on any Indy formation.

BEDU thinner but weekly somewhat interesting over this week’s high.

ZTO needs a base but decent chart here.

HMI breaking out of resistance:

Take a look at the scan and have at it!   Market near highs going into long weekend — small caps often where opportunity is during these type of times.   Small cap momentum stocks can be pretty ruthless if they fail, so please don’t chase!

In broader market — we’d like 270 to be defended on $SPY.   Market can’t seem to make headway away from support, but not breaking down either.    XLF SMH good action (we’re long both) and IWM still leader.