David Sylvain

Posts Tagged 'waheguru boutique'

Stock Market Analysis: 01/13/11

Smart thinking. That’s exactly what you should be doing. Doing this daily everyday builds incremental expertise. The best part of doing it is , you will build your own knowledge and base your trading based on your own observation and your own derived rules based on what “actually” happens in a the market. If you are trading AIG, don’t leave your computer screens. Several decades ago, Apple had the opportunity to license the operating system to other personal computer manufacturers. I will still be watching this boutiques closely for a potential trading opportunity on Monday. The process of going through these past immediate winners helps us incrementally improve our trading as we gain better insight. A book , or a blog , or a twit is not going to help you much unless you start getting in to depth of that move. On the first day of start of their 8% plus move they have significant range expansion. That results in continuation of move for few days.

 

One of the presenter in the stockbee advance bootcamp studied the big explosive moves and discovered that stocks that go up a lot in 5 to 30 days show some patterns in first 3 bars on 5 minute or 30 minute charts. There are many traders who are obsessed by the index moves and you will see everyday they spend considerable time analyzing them using chart patterns or pivots or support and resistance. The indexes have been up 5 to 6% at best this year, but we are already up several multiples of that with minuscule risk using such explosive moves. There are many variations of the 3 to 5 day momentum bursts you will find if you do this for months. When there is range expansion early in the morning or during the day it attracts breakout swing traders like me and many others who scan for these kind of moves, it attracts other momentum players, day traders, quants and so on.

 

In order to do this I run 2 scan one bullish and bearish. If you scan for range expansion everyday you can find such moves. But as a swing trader my primary focus is on finding individual stocks with explosive short term moves. Instead of looking at the number in your chequebook, look at how much of a percent gain and loss you take on each stock over the short and long term. If you keep holding after the 3 to 10 days period, you would often see the stock ends up giving up all the burst gains and may not have another momentum burst for several weeks or months. They most often start with narrow range days. When you do it over and over gain you start finding small nuances to look for in successful breakouts. You make money by compounding these small gains. At one point I saw millions of shares stacked at the buy queue which was then it was removed, followed by small lots sell down as shown in the minute chart.