The up-trend remains intact and the GMI and GMI-R are still at their maximum values.
ARMH may be forming a cup-with-handle base. ARMH is an RWB rocket stock. The traditional IBD approach would be to buy it upon a high volume break out a little above the high of the handle, at about 19.06. However, another way I like to to buy is after the stock bounces off its rising 30 day average (red line). After the purchase, I would place my stop order to sell below Monday’s low, at about $18.19. Buying off of the bounce of a proper moving average is a nice strategy because the stop loss can be placed based on the technicals not far from the purchase price, thus producing a small loss if the trade does not work out. (However, the stock may never follow through with the break-out above the handle.) I have found that the most stress free way to trade is to place a proper stop loss order immediately after taking on a position, thereby defining the likely risk. If the stock acts poorly I am likely to be sold out with a small loss and can later buy it back or move on to another stock. Every small loss brings me to the next gain. Click on chart to enlarge.
Good strategy. I would be a little afraid of ARMH because it has a tendency to gap all over the place (up and down). Also, semiconductor stocks have been under performing the market since the recent short term uptrend began.
Thank you for your comment. The Turtles learned to play all buy signals according to their rules and then to set stops. One never knows if a trade will work out so one must limit losses until they hit a real trend. I have no idea whether ARMH will work out, but that is what makes the market. Richard Dennis, one of the Turtles’ two mentors, once said that one could probably buy stocks by trial and error and do well as long as one kept their losses small. That is the way of the true trend follower.
Very true about limiting your losses. I’ve learned that the hard way (more than once). But, with the help of your great website, I’m ready to change my ways.
I am very interested in how the semis will do. Most of them appear to be basing right now. Will they break out and help push the market higher, or will they fizzle out? One never knows, but that is why you limit your losses.
Wishing you a Wealthy New Year.
Great call on ARMH! Big news with MSFT.