It is a waste of time trying to analyze a holiday market. Enjoy your Thanksgiving weekend, eat well, and stay safe.
I have written an article on how I scan stocks for purchase, below. There will be others this weekend about money management and selling.
New Swing Longs: NONE
Longs Outperforming Market: NDAQ-320% BBD-87% ANAD-69% AAPL-49% RY-40% AKAM-28% CWTR DEZ NXG PTC GG HEII TESOF CHE LOGI
New Swing Shorts: NONE
Shorts Outperforming Market: NONE
Stocks On Radar Screen: STAA CAU AERTA RITA COBR
6 comments:
AIRM - why did it not show up in your scans? or did you leave it out purposely.
What do you think of it's very tight base breakout?
AIRM has nothing I look for in a breakout. If you are talking about the most recent breakout two days ago, there wasnt enough time basing. You cant breakout from a 3 day base and make big gains. If you are talking about the breakout in November, it was way too extended to be a buy.
If you look at charts I buy you will notice they trade much tighter than this stock. To be quite honest the chart is ugly. I dont like it, even though it is moving up. It is very eratic and has too wild price swings intraday. That is due to its low volume and poor market makers that do that on purpose.
The breakout was good and AIRM is in a hot sector, but this is no chart I want to gamble with. I have enough problem with small stocks in solid formed bases sometimes, dont need to get involved with the wild trading ones also.
Overall, AIRM is probably going higher. But it will be going higher wihout me unless it reforms another base that last at least five weeks. Then it has to breakout without going to far on the breakout day like it did in early November.
Thank you for the great question.
" If you are talking about the breakout in November, it was way too extended to be a buy."
How do I determine this? See to my untrained eye I only really see a flat base from AUGUST-SEPTEMBER(1st base) then this other tight consolidation period which goes from about OCT-NOV. So that would make it 2nd base(in my eyes), which is not extended.
I'm assuming you might have a minimum time period for a proper base to form(before you 'count' it). Do you count ANY conslidation period which exists for more then 1 month or somthing along that line?
Josh, working through the CANSLIM select list I've noticed GGB is forming a cup/handle since Oct and on the weekly, this is also at the pivot of a cup/handle forming since March this year. Combined with the fact the stocks 50dma is about 6-7% from the buy point can you see any faults with it?
That flat base you are refering to wasnt flat at all. It was trending upward before the breakout. The breakout was then 7.5% above pivot point. That is beyond the SAFE 5% threshold. Still since this has been a strong market, it worked anyway. However, since the chart was choppy and the base was improper, I decided to pass.
It is a good stock, with strong fundamentals, in a strong sector. I like this stock. It just didnt setup correctly for me to risk a purchase.
It worked this time. But, remember, at the day of the breakout you are looking at we didnt know it was going higher. That kind of choppy trading (sept 04 to aug 05) coming from a downtrend which is then followed by a breakout normally ends bad.
GGB is a great stock. I love its financials and it long term chart. However the time to buy the stock was in September as it broke out of its sloppy cup with handle. And the breakout came on volume that was barely above its 50 dma. So justifying that buy would have only been useful had you argued how great the financials were. Because the chart was flawed. The real only good time to buy this stock was back in April of 2003.
The cup with handle you are refering to in October is not a cup with handle at all. The base is too short, too choppy, and has bad volume characteristics. You want to see a smoother, quieter, and longer base. Like TRAD from July to October.
The second cup with handle you are refering to is also not a cup with handle. If anything it is a high cup with handle. Still though it is choppy and not the best chart to call.
Simply put, gold stocks dont create the sound great bases you normally see from the markets big winners. They are always choppy and the closest one to perfect is DEZ. And in the recent base of DEZ there was ton of action. But all the big volume days came when DEZ closed up or in the upper half of price range. That is very bullish.
Gold is HOT but trying to analyze gold charts are a waste of time normally.
I recommend going to www.investors.com and studying bases. "The Learning Center" will help you learn what to look for.
Everything you need to know is there. EVERYTHING.
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