These are the 6 stocks I said had reached an ATH on Friday, August 14. They were all stocks from Oil & GAS Equipment & Service industries. Every night I use TC2000 to scan more than 6,500 US stocks to find those that had reached an ATH that day. I then sort the list by industry and look for those where multiple stocks had reached an ATH. On August 14, these 6 caught my attention. I published the list and have noted that on subsequent days, even today, multiple stocks in the Oil & GAS Equipment & Service industry have reached an ATH. I recall that during the April and May strong tech market, many Semiconductor stocks were hitting ATHs. Stocks being bid up to ATHS are showing incredible relative strength because fewer than 1% of all stocks do so on any trading day. You may think that buying stocks at an ATH is too late to get on board but that is what the great Nicolas Darvas and William O’neil did. See my webinars tab on my blog to view the TraderLion presentations I have done in which I presented the evidence. So how well have the 6 stocks I wrote about done since August 14 through Wednesday?
The second column shows the percentage change from 8/14 to 9/9. Three of the six are up 12%-14% while three declined 1%-5%, the percentages are rounded. During this same period SPY and QQQ declined about 2%. Most traders estimate that about 50% of their trades are profitable, so that is expected here. I noticed that the 3 trades that were profitable were the most expensive stocks. Buy high and sell higher works! To push expensive stocks to ATHs may take a lot of money and we want the deep pocketed funds to be buying. Small traders are probably afraid to buy high priced stocks but a high price and an ATH shows a lot of buying. You can access my blog post for August 16 on my blog. Today was a very weak day, and only 15 stocks reached an ATH, but more than one half (8) were again OIL & GAS Equipment & Service. See the list below.
With the current events in the middle east and the rising oil price, it is obvious why a majority of the few rare stocks trading at an ATH are connected to oil. But my point is that the behavior of multiple oil stocks repeatedly hitting ATHs is probably all we need to know, just as it was for semiconductors in April and May. I am not saying someone should go out and just buy any of these stocks now. One must first look at their earnings trends and develop technical setups that control risk before buying these high flyers. I use my GLB and Blue Dot setups to buy stocks trading at ATHs, to be discussed at another time. Also, the GMI=2 and there were more new yearly lows than highs today, signs of significant market weakness. The GMI could flash Red tomorrow. I am mainly in cash in my trading accounts but hold some Oil & Gas and Shipping related stocks, which all rose today.
