Covestor - Don_Bartell Blog

TBT and PST to benefit if Barron's is right about the Bond Bubble

Tue, 06 Jan 2009 08:01:10

Barron's (Jan 4, p. 20) makes a strong case that Treasury Bonds offer little safety if the economy strengthens, the dollar weakens, or inflation picks up. http://www.reuters.com/article/marketsNews/idUSN0432990620090104

I bought PST, the 7-10 year Proshares ultra short ETF on T-bonds, and TBT, the 20+ yr ultra short ETF on T-bonds, as they surged on very heavy volume from short double bottoms set up in the last few weeks. My initial stop on PST is 50.99. My initial stop on TBT is 35.81.

Related Stocks: TBT

AOB: A rated small cap in Medical-Biomed/Biotech subsector breaks out

Tue, 06 Jan 2009 08:01:41

I bought this stock based on its high volume breakout from a 7 week sideways pattern. IBD gives it an overall grade of A, and ranks it #13 out of 251 in its subsector. Cap = 573 PSR = 2.35 EPS = 93 RS = 98. My initial stop = 5.43.

Related Stocks: AOB

BGU: 3 X Bull ETF on IWB the Russell 1000

Tue, 06 Jan 2009 08:01:29

I bought this leveraged ETF based on my trend following system buy stop. This coincided with the market moving above the buy point in a cup with handle. As a reminder, although this ETF is leveraged, except for the daily volatility being about 3 times the underlying, my own risk in it is the initial risk that I most care about, and that's at about 1% of my total account. My initial stop is at 26.78.

Related Stocks: BGU

Getting Ready, 1/5/09: 16 highly rated stocks on my watchlist

Sun, 04 Jan 2009 12:01:10

After the recent big down move and the failed rallies of the last half year, it’s a bit difficult to believe that this rally is really going anywhere. There’s still a lot of bearish news coming in daily, with predictions of infinitely worse things to come. But as I’ve mentioned before, whatever value predictions may have, no matter how they are arrived at, and however accurate they may be from time to time, I think there’s a major downside to focusing on predictions. A trader’s main task–and I believe this applies to every trader in existence–is to limit losses and let profits run. I believe the best way to do this is with a trend following system, which means that you go with what’s happening (reality), as opposed to what you believe will happen (your wildest hopes and dreams). For example, take my attached watch list. I’m going to take any of these that break out, based on several slightly predictive historical criteria. I’d like to buy a stock that’s cheap and going up. O’Shaughnessy found that of all the common value ratios, a low PSR (Price Sales Ratio) was the best measure of cheapness. Stocks with the lowest PSR’s have historically outperformed all other value, growth, and momentum ratios. Cheap is not (cannot be) a measure of how much a stock has dropped. It’s a measure of how high the Sales, Earnings, Book Value, or Cash Flow are, relative to the price. But I want to avoid the notorious “value trap” of buying a stock that’s cheap, but cheap for a reason, and going nowhere fast. O’Shaughnessy also found that a high RS (Relative Strength) ratio in combination with low value ratios did even better. So my goal with the trades on this list is to buy something cheap that’s going up. This is implicitly fundamentally and technically predictive. But however important selection criteria may be, the best of these only support an uncertain likelihood. After these trades are put on, actual price action is what determines my profit or loss, not the overall reliability of any fundamental or technical analysis, no matter how learned it may be. So I track every trade with a loss limiting/profit protecting stop. This doesn’t improve the chance that the trade will go my way, but it does improve my chances of surviving treacherous markets. During 2008, over half of my trades were losers, but I finished up 13.7% net. My program now has me nearly 100% long again. If this rally develops into something serious, I’m going to make some money. If it’s another head fake, I’m probably going to lose a little on most of these trades, and will then once more be back in bear market ETF’s (can’t sell short, as this is an IRA).

ShareThis

TNA: 3x Bull ETF on Russell 2000

Thu, 01 Jan 2009 20:01:24

This is a bit of an experiment, as these new triple leveraged ETF's are still fairly new. And I must say, the recommendation of my Covestor friend Jay Zalowitz (jayzalowitz.com) to instead use my buy signals to short the opposite ETF (which would be TZA, the 3x Bear ETF on the Russell 2000) has special merit. My program aims for intermediate term moves, and given the recent broad strengthening in the markets, and in spite of my long term bearishness, I think there's a case for a substantial further rally in the next few months. So just in case that actually happens, I'm going to be taking my system signals on this ETF, and the other three 3X bull market ETF's, BGU, ERX, and FAS. My initial stop is at 21.03.

Related Stocks: TNA

DCP: A+ rated small cap bought on high volume move higher

Thu, 01 Jan 2009 20:01:49

I bought DCP based on its high volume surge above the highs of the last 7 weeks. Looking at the chart, one might argue against this, as it's now bumping up against resistance at the 200 day ma and the mid-September low. In the long run, I've found that my program does better when I ignore those types of drawbacks. For every time that I get a signal that's contrary to basic chart support or resistance, there are roughly an equal number of times in which it slices through those like a hot knife through butter. So, yes, I can see those areas, but since my program is geared towards an intermediate trend, it works better when I ignore short term chart resistance when my program says buy, and the chart says sell. IBD gives DCP an overall score of A+ and ranks it #3 out of 48 in the Commercial Svcs-Security/Sfty subsector. PSR is 0.33 EPS = 98 RS = 80. My initial stop is at 13.18.

Related Stocks: DCP

SJI: Highly rated high relative strength stock breaks out on volume

Thu, 01 Jan 2009 20:01:32

IBD rates SJI A+, and ranks it #1 out of 32 in the Utility-Gas Distribution subsector. I bought it based on its high volume breakout from a 5 week sideways pattern, which also coincided with new 52 week highs. PSR = 1.16 EPS = 86 RS = 94. My initial stop is at 33.91.

Related Stocks: SJI

Coming up: the greatest earnings season of all time?

Sun, 28 Dec 2008 11:12:10

I couldn’t help noticing this letter from Dominick Speziale in Barron’s Mailbag, Dec 29, 2008, page 34: “By slamming rates to the floor, the Fed is also setting up the greatest earnings quarter in history–all due to mark-to-the-market. Every bank and financial firm will be able to resetl their bonds or mortgages or asset-backed paper portfolios to more normal levels. Just resetting Fannie and Freddie paper will reinvigorate the vast majority of banks. This will be the greatest earnings season of all time, with a corresponding explosion in the stock market. All without building a single car, boat, airplane, Winnebago, or whatever.” I’m not personally in a position to evaluate Mr. Speziale’s thought, but I couldn’t help wondering, good grief, what if he’s right? I don’t intend to miss out, so have prepared a watchlist of highly rated growth and value stocks, mostly small caps, that are near new breakouts. All have been under accumulation in recent weeks, and many are ranked #1 in their respective subsectors. If this rally never materializes, I won’t be in it. But if it does, I plan on being on board for the ride.

Check these out: AAON, CPK, ENSG, HOMB, HS, ISH, PNY, PSEC, SJI, SYKE

Related Stocks: CPLA, DIS, ISH

DAG: 2 x Ultra bull commodity ETF on Corn Soybeans Wheat and Sugar

Sat, 27 Dec 2008 15:12:28

I bought this ETF based on my system buy signal, which happens to coincide with a move above the 50 day, and new 6 week highs. I also have been tracking all individual commodities, and note that the grains are all in new uptrends. I believe that the massive increase in the supply of dollars floating around in the ether will eventually lead to a substantial increase in the price of all commodities. Gold and silver appear to have bottomed and be headed higher. Cocoa has had a substantial move up already. Most other currencies have been gaining against the dollar. I will be buying all of the other key commodity ETF's as they turn up. On the bullish side, these are BDD, COW, CYB, DBC, DXO, DYY, UNG, and USD. My initial stop on DAG is at 7.15.

Related Stocks: DAG

SINT: Another low PSR high RS small cap bought on high volume breakout

Sat, 27 Dec 2008 15:12:24

I bought this stock based on its high volume breakout to new highs from a 14 week sideways pattern. IBD gives SINT an overall rating of A-. Cap = 416 mil PSR = 0.69 RS = 98. My initial stop is at 30.02.

Related Stocks: SINT

JJSF: Another A rated small cap with low PSR and High RS bought on breakout

Sat, 27 Dec 2008 15:12:53

I bought this small cap based on its high volume breakout from a 9 week sideways pattern. IBD gives it an overall rating of A, and ranks it #3 out of 46 in the Food-Misc Preparation subsector. To be honest, I always have a bit of difficulty taking a buy signal on stocks in boring sounding subsectors, but after what I've seen happen to a few of these over the years, especially in comparison with stocks in exciting high tech or bio tech sectors, I now make a special effort to make theses trades when they meet all of my criteria. Cap = 559 mil PSR = 0.88 RS = 95. My initial stop is at 27.77.

Related Stocks: JJSF

TWGP: A+ rated small cap bought on high volume breakout

Sat, 27 Dec 2008 15:12:41

I bought this stock based on its high volume breakout from a 5 week consolidation. IBD gives it an overall rating of A+, and ranks it #1 out of 102 in the Insurance-Prop/Cas/Titl subsector. Cap = 557 mil PSR = 1.18 EPS = 95 RS = 89. My initial stop is at 19.08.

Related Stocks: TWGP

DORM: Hi RS low PSR small cap bought on high volume breakout

Sat, 27 Dec 2008 15:12:54

I bought this 200 mil small cap based on its high volume breakout from a 6 week consolidation. IBD gives DORM an overall rating of B, and ranks it #1 out of 8 in the Auto/Truck-Replacement parts subsector. PSR = -0.52 RS = 92. My initial stop is at 8.26.

Related Stocks: DORM

DTO: 2x bear market ETF on crude oil

Thu, 18 Dec 2008 14:12:02

Given OPEC's decision to cut production, I was a bit hesitant in taking my system's buy signal on this, but I do recall that their historical cuts in an effort to prop up the price have failed miserably, as the individual members cheat. My initial stop is at 110.35.

Related Stocks: DTO

FHC: Hi RS volatile microcap bought on pullback to support

Thu, 18 Dec 2008 14:12:00

This stock didn't really meet all of my minimum criteria (so why did I buy it?--beats me). But it had broken out of a 7 week pattern to new 52 week highs on high volume. I missed the initial move, so bought it on a pullback to the breakout point of 3.19. Cap = 96 mil RS = 99 My initial stop is at 1.786.

Related Stocks: FHC

ERX: 3X Bull ETF on IYE, the energy index

Sun, 14 Dec 2008 16:12:44

I bought this new leveraged ETF based on my system buy signal. My initial stop is at 31.36. I'll be taking the buy signals on three other 3X Bull ETF's in the near future:

BGU: based on IWB, the Russell 1000

FAS: based on IYF, the DJ Financials

TNA: based on IWM, the Russell 2000

Related Stocks: ERX

IIIN: Another highly rated small cap with low PSR and high RS

Sun, 14 Dec 2008 16:12:56

IBD gives IIIN an overall grade of A-, and ranks it #2 out of 41 in the Metal Proc & Fabrication subsector. Navellier gives it an AAA, his highest rating. Cap = 170 mil PSR = 0.47 RS = 81. I bought it on a pullback to the 10/31 high of 10.10. My initial stop is at 7.89.

Related Stocks: IIIN

SXCI: A+ rated small cap with low PSR and High RS makes new 52 week highs

Sun, 14 Dec 2008 16:12:33

IBD gives SXCI an overall grade of A+, and ranks it #1 out of 28 in the Computer Software-Medical Subsector. Navellier gives it an AAB. Cap = 313 mil PSR = 0.62 RS = 96. It has broken out to new 52 week highs on high volume. My initial stop is at 13.29.

Related Stocks: SXCI

URR: 2 X Bull ETF on the Euro gaps up out of bottom formation

Sun, 14 Dec 2008 16:12:34

I bought this based on its high volume gap up out of a 6 week bottoming pattern. Initial stop is at 25.89.

Related Stocks: URR

CSKI: China Sky One Medical, an A-rated small cap up on volume

Sun, 14 Dec 2008 16:12:48

IBD gives CSKI and overall score of A. It's another small cap, 189. PSR = 2.15 RS = 88. I bought it based on its high volume move above the mid-November rally high. My initial stop is at 7.97.

Related Stocks: CSKI

ACET: A rated small cap with low PSR and high RS breaks out

Sun, 14 Dec 2008 16:12:52

IBD gives ACET an overall grade of A, and ranks it 4th out of 47 in the Chemicals-Specialty subsector. Navellier gives it an AAA, his highest rating. Cap = 233 mil. PSR = 0.57 RS = 98. I bought it based on its high volume breakout to new 52 week highs. My initial stop is at 7.12.

Related Stocks: ACET

INSU:Top rated small cap bought on high volume breakout

Sun, 14 Dec 2008 16:12:23

INSU gets an A- from IBD, and is ranked 3rd of out 11 in the Pollution Control-Equip subsector. Navellier gives it an AAB. Cap = 523 mil PSR = 0.90 RS = 98. I bought itb ased on its high volume breakout to new 52 week highs. My initial stop is at 12.67.

Related Stocks: INSU

Getting Ready, Dec 15, 2008: 16 highly rated small caps with low PSR and high RS

Sun, 14 Dec 2008 09:12:09

Here’s my new watch list of highly rated small caps with low PSR and high RS. I’ll be buying any of these that hit the buy stops indicated, provided the minimum volume is also met. As a reminder, small caps have historically significantly outperformed large caps. And even though they do take turns from time to time, the overall performance of small caps dwarfs that of large caps. As for the low PSR, O’Shaughnessy found a low PSR to be the most reliable of value ratios. When combined with a high RS, stocks with low PSR’s have done especially well. And as I mentioned last week, I’ve noticed that small caps have also significantly outperformed after down years. See Barron’s (Dec 15, 2008) reference to Mebane Faber’s observations of this effect at http://worldbeta.blogspot.com/2008/12/january-effect-after-really-bad-years.html

ShareThis

Related Stocks: HIT

Getting Ready, Dec 8, 2008: Two dozen highly rated small caps

Sun, 07 Dec 2008 10:12:56

So, just in case this turns into a serious rally, I’m getting ready. I’m currently nearly 50% in cash, and my stops on my remaining Bear Market ETF’s are very close. If they were all to get hit, I’d have enough cash for about two dozen positions. I’ve reviewed my original thinking about small caps vs large, and value stocks vs so-called growth stocks, and lo and behold, come to the same conclusion: Long term, small beats large, and value beats growth. And not just slightly. Furthermore, I’ve gone back and examined O’Shaughnessy’s research on size and value ratios after down years, and found that in both cases, small caps significantly beat large, and low value ratios significantly beat high. The attached list is of two dozen small caps, all under $1 billion capitalization, all with a PSR less than or equal to 1.00, and all with a high RS (Relative Strength). In his conclusions, O’Shaughnessy found that stocks with low value ratios (they’re cheap), combined with high RS (they’re going up), significantly outperformed any other combination of ratios.

In addition, these are all highly rated by either IBD or Navellier, as determined by their proprietary criteria, and have been undergoing a bullish shift in their Accumulation/Distribution scores. My buy signals will become valid if the price moves up through those on the volume indicated, which is the equivalent of two standard deviations. In other words, it has to be very high volume, or I’ll not take the signal. And as usual, if filled, I’ll then enter my initial stop, which is also indicated.

ShareThis

Related Stocks: HIT

GTIV: A+ rated small cap moves up on high volume

Wed, 03 Dec 2008 22:12:36

I bought this stocks based on its high volume move above recent highs, from a 5 week sideways pattern. IBD ranks GTIV #1 out of 24 in the Medical-Outpatient/Home Care subsector. Cap = 723 mil PSR is a low 0.52 EPS = 93 RS = 98. My initial stop is at 21.68.

Related Stocks: GTIV

NPK: A+ rated small cap surges on volume

Wed, 03 Dec 2008 22:12:05

I bought this stock based on its high volume move up out of a short 4 week consolidation. IBD rates NPK #1 out of 7 in the Household-Appliances subsector. Cap = 437 mil PSR = 0.98 EPS = 90 RS = 94. My initial stop is at 52.71.

Related Stocks: NPK

TSYS: Another A+ rated small cap bought on recent strength

Tue, 02 Dec 2008 14:12:19

IBD gives TSYS an overall rating of A+. I bought it as it moved up from a short 5 week consolidation on a big increase in volume. Cap = 287 mil. PSR = 1.47 EPS = 71 RS = 99. My initial stop is at 5.50.

Related Stocks: TSYS

HMSY: A+ rated growth stock breaks out on volume

Tue, 25 Nov 2008 06:11:46

I bought this as it broke out from a 14 week sideways pattern. Volume grew substantially as it approached and broke through this chart point. IBD gives HMSY an overall rating of A+, and ranks it #1 out of 16 stocks in the Commercial Svcs-Healthcase subsector. Cap = 676 Mil PSR = 3.76 EPS = 92 RS = 97. My initial stop is at 21.68.

Related Stocks: HMSY

INT: Highly rated stock in Oil & Gas Field Svcs subsector

Tue, 25 Nov 2008 05:11:42

I missed the initial breakout on this stock, and so bought it on a pullback to support. IBD gives INT an overall rating of A, and ranks it #1 out of 46 in the Oil & Gas- Field Svcs subsector. Navellier gives it an AAA, his highest rating. The PSR is 0.04, which means that sales, relative to the price, are ultra high. As O'Shaughnessy has pointed out, stocks in the lowest PSR decile, as in this case, outperformed all other single criteria of stocks over the last 50+ years, by a substantial amount, and with less risk. EPS = 95. RS = 97. My initial stop is at 30.46.

Related Stocks: INT

CYB: ETF on Chinese Yuan

Tue, 25 Nov 2008 05:11:39

I bought this as it touched off my system buy stop. Since then, it's gone nowhere, but I will stay with this trade until my stop is hit. My initial stop was at 25.89.

At some point in time, I believe the Yuan will move higher.

Related Stocks: CYB

SZK: Ultrashort ETF on Consumer Goods index

Tue, 25 Nov 2008 05:11:16

I bought this as my system buy stop was touched off, and as what appeared to be a resumption of the overall bear market. My initial stop was at 86.00, and has since moved up to 89.03.

Related Stocks: SZK

DRR: Ultrashort ETN on the Euro

Tue, 25 Nov 2008 05:11:59

I bought this on 11/11 as my trend following system touched off another buy signal within the longer term uptrend. Initial stop was at 51.17, and has since moved up to 53.62. As of 11/24, there are increasing signs that the Euro is bottoming, so for now, this trade isn't looking very good. However, since a 100% adherence to my system has historically outperformed my actual record, I'm staying in this until my stop is hit, at which point I'll reverse and go long the Euro, via URR.

Related Stocks: DRR

Gold again

Fri, 21 Nov 2008 10:11:13

I was stopped out of DZZ, my 2x bear market ETN on gold, and have now been stoppen into DGP, the 2x bull ETN. I have no idea whether this is the real thing, or just another head fake, but I notice we do have a fairly good range on the day, and have taken out the highs of the last few weeks. So far, I'm only puttig about 1/2% of the account at risk on this, but intend to take additional buy signals on the top 10 gold stocks, and silver. My initial stop on DGP is at 11.78, which corresponds to just under the recent lows on GLD.

Paulson humor

Wed, 12 Nov 2008 23:11:31

ShareThis

BOM: 2 X Inverse Base Metals ETF and a few comments about a change in my strategy

Mon, 10 Nov 2008 12:11:32

BOM is one of the leveraged ETF's that are designed to benefit from Bear Markets. This one is based on the base metals--Copper, Zinc, and Aluminum. My initial stop is at 45.25.

Regarding my overall strategy, I'm in the process of modifying my risk parameters (downwards) to increase my ability to be more broadly diversified, and to be able to participate in a broader range of commodity based ETF's. Part of this involves an ongoing downsizing of some of my current positions, which I've been doing for some weeks now with my ETF's.

Given the magnitude of the recent worldwide bailouts of underperforming banks, in particular, it is my belief that the long term (the coming years) potential for stocks is very poor, that the potential for a major increase in inflation is large, and that the next very large move therefore will be in commodities. I believe we are roughly going to repeat the 70's, in which it was actually difficult not to make money in commodities, and was not all that easy to make money in stocks.

So I'm gearing up to take all buy signals in a wide range of commodity based ETF's.

Related Stocks: BOM

DEE: 2 X inverse commodity index ETN makes new highs

Fri, 07 Nov 2008 10:11:02

DEE is another leveraged ETN on commodities--this one, on a basket of Crude Oil, Heating Oil,Corn, Wheat,Gold,and Aluminum. My initial stop is at 42.24.

Related Stocks: DEE

OZRK: A+ rated bank stock up on volume

Wed, 05 Nov 2008 06:11:35

IBD gives OZRK an overall score of A+ and ranks it #3 out of 137 in the Banks-Southeast subsector. I bought it based on my system buy signal, triggered by this upmove on double average volume. Cap = 511 mil PSR = 4.77 EPS = 63 RS = 97. My initial stop is at 23.64.

Related Stocks: OZRK

EMS: A+ rated stock, low PSR, high RS, makes high volume breakout to new highs

Tue, 04 Nov 2008 21:11:22

IBD gives EMS an A+, and ranks it #1 out of 48 in the Commercial Svcs-Security/Safety subsector. Cap = 1366 mil PSR = 0.60 EPS = 78 RS = 97. It has broken from an 8 week pattern to new 52 week highs. My initial stop is at 26.63.

Related Stocks: EMS

AXYS: A+ rated stock moves up on high volume

Mon, 03 Nov 2008 19:11:13

IBD gives AXYS an A+, and ranks it #1 out of 15 in the Elec-Military Systems subsector. Cap = 785 mil PSR = 2.85 EPS = 90 RS = 98. My initial stop is at 47.07.

Related Stocks: AXYS

VSEC: Low PSR small cap surges on high volume

Mon, 03 Nov 2008 19:11:35

IBD gives VSEC and overall rating of A, and ranks it # 4 out of 47 in the Commercial Svcs-Misc subsector. Cap = 166 mil PSR = 0.17 EPS = 98 RS = 89. My initial stop is at 23.93.

Related Stocks: VSEC

VASC: A rated medical product small cap breaks out on volume

Sun, 02 Nov 2008 15:11:32

IBD gives VASC an overall score of A, and when it broke out, ranked it # 9 out of 120 in the Medical-Products subsector. Cap = 152 PSR = 2.31 EPS = 67 RS = 99. I bought it on the basis of its high volume breakout from a 6 week sideways pattern to new 52 week highs. My initial stop = 7.05

Related Stocks: VASC

LHCG: Another + rated small cap breaks out to new 52 week highs

Sun, 02 Nov 2008 15:11:25

IBD gives LHCG an A+, and ranks it #1 out of 24 in the Medical-Outpnt/Home Care subsector. Cap = 604 PSR = 1.38 EPS = 85 RS = 99. I bought it on the basis of its high volume breakout from a 12 week sideways pattern to new 52 week highs. My initial stop is at 23.32.

Related Stocks: LHCG

AVAV: A+ rated small cap makes high volume move to new highs

Sun, 02 Nov 2008 15:11:10

IBD gives AVAV an overall rating of A+, and ranks it #1 out of 15 in the Elec-Military Systems subsector. Cap = 701 mil PSR = 2.91 EPS = 87 RS = 98. I bought it on the basis of its high volume high range breakout to new 52 week highs, from a 7 week sideways pattern. My initial stop is at 25.93.

Related Stocks: AVAV

EBS: Bought A+ rated Biomed stock on pullback to support

Sun, 02 Nov 2008 15:11:55

IBD gives EBS and overall rating of A+, and ranks it #1 out of 259 in the Medical-Biomed/Biotech subsector. I missed the actual breakout 10/14, but managed to get in on the pullback to 15.18 a week later. Initial Cap = 466 mil; PSR = 2.07 EPS = 97; RS = 99. My initial stop = 13.50.

Related Stocks: EBS

Getting Ready, Nov 3, 2008: 33 Highly Rated stocks

Sun, 02 Nov 2008 09:11:02

So, with the strength this last week, which triggered an IBD follow through day signalling a new Confirmed Rally, I thought I’d gear up for the possibility that this one will actually amount to something. The charts of the major indexes still look bearish to me, but there have been some decent breakouts the last few days, and a number of highly rated stocks are approaching my system buy signals, so I’m going to go with any of these that meet my minimum volume requirements. Then there’s that ETF, TBT, at the bottom of the chart, with a head and shoulders bottom developing.

So, what if I take all of these signals and the rally fizzles? I’ll lose a little bit on each one. What if, against all reason, it turns into something serious? I’m going to make some decent money. And what if all of this turns out to be a figment of my imagination, and we plummet to new lows from here? In that case, I’ll admire all of these wannabe breakouts from afar, stay with my Bear Market ETF’s, and wait for the next sign of a bottom.

ShareThis

Related Stocks: NOV

Getting Ready for a Reverse Turkey: 37 Highly Rated Growth Stocks

Sat, 25 Oct 2008 14:10:20

It’s not that I really expect this to happen. But I do have about 65% of the account in cash, which is burning a hole in my pocket, so, in the remote chance that someone waves a magic wand and the market suddenly finds its footing, I intend to buy every one of these that break out and meet my volume and range minimums, as long as cash holds out. All of these are rated highly, as defined by IBD’s growth stock criteria. About a third have low Price Sales ratios, so by that measure they’re also value stocks. All have high Relative Strength scores.
But wait a minute, doesn’t everyone know that it’s risky to buy anything in a market like this? Sure, if you’re buying something that’s headed south. And although most stocks follow the trend of the overall market, I’ve found that many of my best trades started early.
And since I’m currently heavily short (via Bear Market ETF’s), I intend to be ready for the next tradeable rally, whether it ever happens or not.

ShareThis

NNLX.pk: Tiny penny stock has started to wake up

Fri, 24 Oct 2008 22:10:09

After a certain amount of wavering about this, I have just bought NNLX.pk. This is a Pink Sheet penny stock, which, statistically, has a very small chance of making money. But wait a minute. As I recall from James P O'Shaughnessy's in depth year by year review of the dozens of most commonly followed criteria for all stocks for the last 50+ years, size (capitalization) was the single most relevant factor. In fact, it was so significant, that all other criteria combined are close to irrelevant. The smaller the stock, on average, the greater the long term potential. I've also looked at all of my 3500+ trades over the last 8 years, sorting them every which way, and found the smaller the better. My most profitable trades were in stocks under $1. I don't trade many Pink Sheet stocks, because I can't enter a stop on them. So my current initial stop is at 0.

But you might say, surely I could have found a "high quality" stock to buy in place of this one? You would mean, of course...[insert here the stocks of virtually every company with a good product, good management, good earnings, good sales, etc that is in free fall, and may not reach your breakeven point in your lifetime]. Well, my definition of good has little to do with those specifics, and everything to do with direction. This little stock started moving up recently, I don't have the faintest idea as to whether it's going to continue or not. If it doesn't, I'm going to lose a small amount of money. Stay tuned!

PS: For all of those details that I know you want to know about this stock, I need to refer you to Petro_Drlg_Eng. He's in the know!

Related Stocks: NNLX

NNLX.pk: Size matters

Fri, 24 Oct 2008 12:10:30

PS: For all of those details that I know you want to know about this stock, I need to refer you to Petro_Drlg_Eng. He's in the know!

Related Stocks: NNLX

ADG: Low PSR High RS microcap

Wed, 22 Oct 2008 20:10:59

I bought this $54 million microcap as it made a high range high volume breakout during the recently deceased confirmed uptrend (per IBD). It sported an Acc/Dis ratio of A, a PSR of 0.45, and an RS of 97. That confirmed uptrend in the overall markets is now history, but I will let the market take me out of this. My initial stop is at 5.87.

Related Stocks: ADG

F: Another American icon too big to fail?

Tue, 21 Oct 2008 10:10:39

Again, to be honest, that was the only reason I had for buying this, because all of the fundamental and technical criteria scream sell. My initial stop is at zero.

Related Stocks: F