16th day of QQQ short term up-trend
GMI-2 fall to 4 but GMI remains at 6.
AAPL showing strength; FCFS bounces;
AAPL is beginning to show some technical strength. For the first time since September, it has now closed above its 10 week average. In the past, I made money by owning AAPL as long as it was above its 10 week average. This weekly chart shows that AAPL found support at a prior green line top. While I prefer to buy a stock that is trading above its last green line top (a base at an all-time high), I am becoming interested in AAPL. The sell-off may have been overdone and the coming week is the end of the quarter when mutual funds dress up their portfolios for their quarterly reports. At the end of 2011, AAPL came back to a prior green line and then mounted a huge rally. Will history repeat?
We are likely to see buying in a lot of other stocks that have done well. I am keeping an eye on LKND and GOOG…. I ran a scan looking for stocks in an up-trend that may have bounced up off of support on Friday. Five stocks came up: FCFS, VRSN, CMCSA, V and APH. All but APH have appeared in one of my watchlists containing stocks noted by IBD at some point. All are above their most recent green line tops. If I bought one, I would place my sell stop below Friday’s low. As an example, look at the daily chart of FCFS.
FCFS also has a beautiful RWB pattern in its weekly Guppy GMMA chart.
FCFS may challenge its all-time high of 55.93 and break through its Bolinger Band. Of course, like any stock, its strength will depend on that of the market.
Speaking of the general market, the GMI remains strong. All of my indicators are positive. The Worden T2108 indicator is at 60%, in neutral territory. Friday was the 15th day (U-15) of the current QQQ short term up-trend.
GMI-2 falls to 4; getting cautious; See you Friday at the Worden Workshop?
The QQQ is getting weak and is on support. A few more down days could end the QQQ short term up-trend. I reduced my position in TQQQ on Thursday. Meanwhile, three oil/gas pipeline stocks hit my scans Thursday night: KMR, PAA and WES. Given their strength, I am considering buying one on Friday. This daily chart of KMR looks promising to me. Note that KMR had a recent green line break-out and then consolidated at that level for weeks. Thursday’s break above its narrowing Bolinger Band channel may be significant.
I will be at the Worden Workshop on Friday. Please say hello if you attend. You can register for free at worden.com.
13th day of QQQ short term up-trend
All of my GMI and GMI-2 indicators are positive.
12th day of QQQ short term up-trend
Short and longer term trends remain up. Holding TQQQ.
11th day of QQQ short term up-trend
Z, TRIP and ONVO held up nicely on Monday.
Some more green line break-out stocks: DFS, WAT, CAB, NEE…..; Dow Theory Buy Signal
One of my most important discoveries is the green line chart. If you go to the side of my blog and select the video I did last December you can see how I build green line charts. That segment is about 78 minutes into the video. Green line stocks are those that have been advanced to an all-time high, consolidated, and then broken out to a new high. These are the winners I seek to own. Any stock that has this pattern is showing unusual technical strength. Furthermore, a stock at an all-time high has no persons who bought at higher prices and are now trying to get out. Said in another way, a green line break-out stock has no overhead supply of stock from people who bought at higher levels and are holding losses. Once I find a green line stock I look to see if the break-out occurred recently and whether it has the type of technical and fundamental characteristics I like. Recent green line break out stocks I own are TRIP, Z, IBM, AXP and CVX.
Back in March 2009, after the devastating market decline, I wrote about GMCR approaching an all-time high. I opined that any stock that could come through that market decline near an all-time high was showing amazing technical strength. I had not discovered the green line approach, but it is interesting to go back to that period and draw it in. Look at this weekly chart of GMCR in 2009, which has been adjusted for stock splits. GMCR went on from that break-out to advance almost 900% before peaking in late 2011. Stocks breaking out of a green line top after a large market decline can become huge winners.
I have a green line break-out scan I wrote for TC2000. Among the green line stocks to show up over the weekend are: WAT, DFS, CAB, NEE, BCE, BOKF, ATR, WSO. I draw the green line on each monthly chart and then examine how it looks on the weekly chart to see how recent the break-out was. DFS is a pretty chart of a stock that had a green line break-out last week.
Another example is CAB.
The way I invest in a green line break-out is to buy a little and wait to see if the green line holds. If it does, and the stock gathers strength I add to my position. A lot of stocks will fall back to the green line before they advance. Green line patterns are longer term in nature and meant to find stocks that will rise for months. Of course, no one knows whether a green line break-out will succeed. That is why I make a small pilot buy and give the stock a chance to prove its strength. I then get out of those that weaken and add to my stronger positions.
Green line patterns work best in up-trending markets, with the GMI on a buy signal–like now. The current GMI buy signal has been in place since February 28. The GMI is at 6 (of 6) and the GMI-2 is at 5 (of 6). Friday was the 10th day (U-10) of the current QQQ short term up-trend. It remains to be seen whether the QQQ will catch up to the SPY and DIA.
By the way, note the recent green line break-out in the Dow 20 Transportation Average. All of those pundits who are suggesting that this market may be too high, may be missing the impressive new up-trend in this critical component of the Dow Theory. The DIA has also had a recent green line break-out, completing a classic Dow Theory buy signal.
My free Houston webinar; Upcoming Worden workshop in DC; CVX: green line break-out
Check out the new link to my free Houston webinar on my blog. It provides a good overview of my trading strategy. It was managed by the very talented Julia Ormond, who will run the Worden workshop next week in the DC area. I will be attending on Friday, but not presenting. I hope to meet many of my readers.
I bought some CVX on Thursday when it broke above its green line top. TC2000 automatically emailed me when the break out occurred. Check out this weekly chart of CVX.
Other break-outs that came up in my scan on Thursday were : SAIA, APOG and SWI (almost).
IBM, Z: green line break-outs; AAPL green line sell signal–last October
I have been buying TQQQ and some individual stocks. I focus on buying green line stocks breaking to all-time highs, like IBM. Check out this green line break-out of IBM on a weekly chart. (Green line is drawn on monthly chart and transfers automatically to other time frames.) As long as IBM holds above the green line, I will hold it.
Another break-out stock I am watching is Z. A green line break-out on a recent IPO (initial public offering) can be very significant.
AAPL provides a good example of what can happen when a green line break-out fails. The sell signal occurred last October, around $648. It is important not to marry even a green line break-out stock. If the top green line break-out does not hold, I sell it.
7th day of QQQ short term up-trend
Trends remain up.
