iBC Machine + Trade Ideasby Danny on May 13th, 2008 at 3:58:50 pm |
(MLI: 18.46 +1.15%) - is up 11 days in a row, an event so rare that out of 7150 stocks, it is the only one meeting this criteria. These have been profitable 1 day shorts for me in the past.
As I have previously mentioned, the problem with this strategy is that maybe tomorrow you get a down .5% day, and that’s the end of it. Or, maybe it moves down 10% over the two weeks. You can’t tell, so the gains on these trades are usually very small. I’ve just found that the statistical likelihood of being “right” (stock goes down on the 12th day) is extremely high.
I see a lot of horsehit semi’s doing well for some reason or another:
(ALTR: 15.66 -2.43%) and (ONNN: 4.36 -5.63%)
On the back of (FLR: 37.94 -3.24%) news, you have (ABB: 13.85 -3.21%) and (FWLT: 27.12 +0.04%) looking great. These are all “buy the dip” situations, provided the market stays healthy and these stocks remain above support.
In a similar vein, (GTI: 7.32 -1.88%) and (GDI: 23.89 +4.78%) are both winners.
Stocks that are oversold and due for a bounce:
(OMG: 15.29 +5.52%)
(PSUN: 3.67 -12.20%)
(AMCN: 6.03 -12.48%)
The iBC machine, for the close, is still looking weak, and slightly overbought. This makes initiating new longs, especially into momentum stocks, less opportune than at other times. Based on the weakness of the Machine, I would enter into the oversold trades, or the short MLI trade, before the momo ones.
I’m liking RICK again too, hope to add between 22-23. Fundies of this one are good, and the business…we all know it is tits.
May 13th, 2008 at 4:04:16 pmTime to go visit the “fun room” at one of their local clubs?
That and banking coin on the stock is egregiously double dipping.
May 13th, 2008 at 4:12:27 pmIs that MLI as in, MeLtIng up?
May 13th, 2008 at 4:15:55 pmDanny:
Didn’t Uncle Howard run from RICK a few weeks ago?
May 13th, 2008 at 4:18:11 pmyou should pay attention to the size of the move. In the case of MLI, it is up about 13% for the last 10 trading sessions. Nothing to get thrilled about.
May 13th, 2008 at 4:23:37 pmI don’t know, I don’t follow Uncle howard anymore, sad to say. I didn’t read blogs in spain, and even then, his blog got off topic when the market when boom DEC - MARCH.
I love uncle howard, he is my uncle, the brother of my father, but I got tired of reading about him “doing less.”
I should but him back in rotation. iBC and Uncle Howard are all you need. Maybe NC and b/w the hedges…
But really, isn’t iBC the best? I get the most utility out of this place, and I’m not just saying that…
RICK popped bc of SSS and a short squeeze, not huge incremental positives in the business, but I still like the stock.
I still believe that if they keep acquiring top clubs and there is no hang up in their stated plan that they can reach $40 on the back of $2.15 2009 eps
May 13th, 2008 at 4:23:40 pmsize of the move no doubt matters, but not as much as you think for this.
I have a 10 days up, with 2 stocks, 11 days up with 1 stock, and a 12 days up with 0 stocks. It’s just an observation, which is why I caveat the trade as pretty much not great. I have found that stocks basically never go up 12 days in a row. However, I full expect that it will happen. It’s just reeeeeaaaallllly rare. I’ll take a 98% chance of a 1-2% move, if I’m so inclined.
I like to post ideas for the reader to pick from rather than spoon feed the stock, the price, the entry, the exit the criteria, on and on. That sounds like the type of thing provided in a subscription service.
if those oversold ideas of whatever sound good, I have faith in your ability to trade them right. I bring them to the table, because I have the software and the knowhow to find these stocks. I can and do trade them myself, and I think you guys can too.
May 13th, 2008 at 4:28:53 pmI certainly agree that 11 up days is a rarity. What would be interesting is to find out how often does it happen in a year, % of winning and losing trades, average size of a winning/losing trade, maximum loss and profit one day after the event (11 up days), one week after the event and 1 month after the event.
May 13th, 2008 at 5:15:16 pmThere is no doubt that I prefer to read about methods, not ready trading ideas.
yeah, that would be an interesting study. And I appreciate the feedback.
re the methods, I am glad, because I prefer to write about that.
These days I am really enjoying reversion to the mean strategies viz, RSI(2), up 11 days, and a few others I’m working on.
CHK had up 11 days, went down 1.5% the next day, and then resumed it’s upward trek, going up several days in a row after that. Perhaps it was HP. In either case, there was something like a 15% move in the 11 trading sessions, so it was very similar to MLI, and a down day was a 1 day event.
I’ve made this trade about 5 times, and am batting 1000, but the gains are quite small. But if someone gets any utility out of it I am happy.
May 13th, 2008 at 6:57:28 pm