There are two mistakes most traders make when building a basket of trading setups.1. They trade setups without and edge.2. They trade the setup in the wrong market.Your trading "edge" gives you a reliable idea of how much you can expect to win with your setup over time. A well tested setup gives you a... Continue Reading →
On the Radar: Residentials
Residential Real Estate and homebuilders is one of the hottest sectors right now, showing strong accumulation, price patterns and relative strength. One of my favorites is DHI. The chart speaks for itself . . .
Education Stocks Showing Accumulation and Relative Strength
A few sectors asserted themselves during last week's market up move. Education stocks are on fire and showing buying interest from the big boys. While most stocks are coming off bottoms and nearing resistance levels, education stocks are near recent highs. Focus list stocks include EDU, DV, CPLA and APOL.
I have been saying almost non-stop over the past couple of weeks that airlines are in a short to intermediate term bottoming formation!!! Take a look at the capitulation day in mid-July, followed by that purdy volume pattern. Does it get any better than that?As noted earlier today, I exited UAUA, for a gain, but... Continue Reading →
Staying Away From Steel
While I am decidedly bearish on most commodity sectors, the one sub-sector I am staying away from is steel. Steel stocks are all over the place.Take a look at the sampling below. Two steel stocks have made huge upside moves and could be reversing the recent topping pattern (AKS and X). MTL, ZEUS and RIO... Continue Reading →
Here is a list of sectors with the highest stochastic readings. I use this information for three setups:1. To find sectors with good chart patterns and await a pullback for entry2. Find sectors with bad chart patterns that are bouncing to resistance and ready to short.3. Find topping patterns in overheated sectors.
Sector Analysis: Discount Variety Stores
As many of you know, I usually spend Sunday evening analyzing sectors and the hot stocks within those groups. Due to time constraints I've been skipping this watchlist ritual, instead only trading stocks that I find through my scans.I had some free time today and was surprised to see Discount Variety Stores among the top... Continue Reading →
The 20 most oversold sectors:The 20 most overbought sectorsHow do I use this information? In the overbought sectors, I look for charts where stocks are near highs and wait for a healthy pullback. In oversold sectors, I look for stocks oversold near support that have good risk-reward potential.
Sectors Nearest New Highs
Here is a list of sectors ranked according to "percent of 52 week high".Most sectors on this list will come as no surprise. However, "regional southwest banks" threw me for a loop. I dug deeper and looked at individual stocks and did not find one that I'd put on my watchlist. Some had decent price... Continue Reading →
Today’s Entry: CSX, DZZ and MTL
I bought 100 shares of MTL at $143.46. The strong broke out over $140 yesterday on strong volume. It's one of the strongest stocks in a strong sector showing loads of accumulation. I may be a bit early on entry (I usually don't enter at overbought stochastic levels), as the stock could pullback to $140.... Continue Reading →