Mike
07-12-2014, 05:55 PM
About 4 months ago Pascal ran a survey that identified that many people on this forum have medium to long term trading horizons. I do to. I run a watch list called the High Growth Stock Selection in the subscription portion of the site. I think it is available to those who subscribe to the real-time models. The stocks in this section are purposely chosen for longer term trading.
A test was conducted in history for stock traits associated with longer term gains. What was found was that fundamentals do matter. Stocks with quarterly EPS growth of 100% or greater and annual EPS growth of 50% or greater tended on average to double in price in 1 year. Stocks with quarterly EPs growth of 50-100% and Annual EPS growth of 25-50% tended to double in two years. Stocks with EPS growths less than this tended to double in three years or not at all. Thus I search for stocks that have traits of big winning stocks. For short term traders none of this matters much as you are only renting the stock for a few days or weeks.
The stocks in the current watch list are: ACT, ARRS, BWLD, ENBL, FB, FLT, KING, MTDR, PANW, PE, UA, and URI. These are all identified with their chart patterns and buy points. With the market rally under pressure it would probably be premature to blindly jump into these. Give the market some time to show its true direction. I have also included 8 possible short opportunities in case the true direction is down.
The above watch lists are for stocks breaking out or down out of a classical chart pattern such as cup with handle, double bottom, flat base, etc. I also buy stocks at alternative buy points, most often a bounce at the 50-day moving average or regaining the 50-day moving average. I also find similar opportunities associated with the 10-day moving average. For these I look for a volume thrust at a point where I can take a position very close to the appropriate moving average. In the future we hope to be able to provide an additional service with real-time volume thrust alerts for these alternative buy points. I use this kind of service on my own machine locally and end up filling half of my portfolio this way. This is where I apply Pascal's statement that a longer term hold can begin with a short-term move. In my case I am just making sure I am taking a short term position in a stock that may be able to develop long legs.
A test was conducted in history for stock traits associated with longer term gains. What was found was that fundamentals do matter. Stocks with quarterly EPS growth of 100% or greater and annual EPS growth of 50% or greater tended on average to double in price in 1 year. Stocks with quarterly EPs growth of 50-100% and Annual EPS growth of 25-50% tended to double in two years. Stocks with EPS growths less than this tended to double in three years or not at all. Thus I search for stocks that have traits of big winning stocks. For short term traders none of this matters much as you are only renting the stock for a few days or weeks.
The stocks in the current watch list are: ACT, ARRS, BWLD, ENBL, FB, FLT, KING, MTDR, PANW, PE, UA, and URI. These are all identified with their chart patterns and buy points. With the market rally under pressure it would probably be premature to blindly jump into these. Give the market some time to show its true direction. I have also included 8 possible short opportunities in case the true direction is down.
The above watch lists are for stocks breaking out or down out of a classical chart pattern such as cup with handle, double bottom, flat base, etc. I also buy stocks at alternative buy points, most often a bounce at the 50-day moving average or regaining the 50-day moving average. I also find similar opportunities associated with the 10-day moving average. For these I look for a volume thrust at a point where I can take a position very close to the appropriate moving average. In the future we hope to be able to provide an additional service with real-time volume thrust alerts for these alternative buy points. I use this kind of service on my own machine locally and end up filling half of my portfolio this way. This is where I apply Pascal's statement that a longer term hold can begin with a short-term move. In my case I am just making sure I am taking a short term position in a stock that may be able to develop long legs.