12 stocks at ATH bouncing from 10 week average: $VRS $SQ $CYBR $RP $CBM $BBU $TTWO $SERV $VRTX $KIDS $I $IRDM

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One of the set-ups I am teaching my students this semester is to buy growth stocks above their last green line top (ATH not exceeded for at least 3 months)  that has bounced up off of (or close to) their 10 week average. The 10 week average (blue dotted line) must  be rising above its 30 week average (solid red line). Once buying the stock on this set-up, they must place their initial hard or mental stop loss below the low of the week of the bounce.  The idea is to buy a strong stock and hold it until the 10 week average is violated at a weekly close. Twelve stocks hitting an ATH (all-time high) on Friday met these criteria as of Friday’s close. Here are three of their weekly charts. The first two have recent earnings increases above 100% and all have already at least doubled over the past year–a sign of strength.

A few other stocks that did not reach an ATH on Friday but have doubled the past year and bounced their 10 week average last week include:  TRHC, NSP, ZEN, BJRI, EVBG, LPSN, RNG, SPSC. SPSC hit all of my favorite set-ups, including a green dot, last week. Here is its daily chart:

We came through the typically weakest month of the market, September,  unscathed. There are some warning signs, though. There were  more new lows than highs on Wednesday through Friday and the strong tech stocks are masking the weakness in much of the rest of the market. The health stocks are also surging (CURE (3x ETF), HUM, HIIQ, UNH, MOH, CNC, WCG). But the financial stocks look weak.  In fact, this weekly chart of the financial ETF, XLF,  shows it may be entering a Stage 4 decline–very ominous and worth monitoring. If the hikes in interest rates don’t help the banks to prosper, it may be telegraphing tough times to come.

 

But the GMI remains on a Green signal–for now.

 

 

 

Waiting for $QQQ to show a green dot

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The chart of QQQ’s daily 10.4 stochastics has arrows that show where the fast stochastic (red line) has crossed above the slow stochastic (blue line). That is what I call a green dot signal, also shown on the price chart by, you guessed it,  green dots. (A video tutorial for building the green dot signal appears in my TC2000 club.) The green dot is a very short term trend signal on the daily chart of a stock or index in an up-trend and indicates that a bounce is likely. Note that most advances begin after the daily 10.4 fast stochastic has fallen below 50 and then has a green dot. The end of a bounce usually occurs after the stochastic is above 80 (upper horizontal line) and  often when it reaches 90 or greater. I therefore think that the QQQ, with Friday’s stochastic reading of 92.67, is overbought and more likely to stall out soon. (QQQ is also near the top of its upper 15.2 Bollinger Band.) I would prefer to place a bet on a rise in the QQQ (or stock) once the stochastic falls below 50 and flashes another green dot signal….

The GMI remains on a Green signal and is at 6 (of 6).

19 Recent IPOs at ATH with recent GLB: $MTCH $TWLO $SEND $SFIX $ROKU $CABO….

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So many stocks are breaking out to all-time highs (ATH). Every rocket stock has a long series of repeated ATH. I went to barchart.com and filtered stocks that hit  an ATH on Friday and copied the list to Excel and then to a watchlist in TC2000.  I then used TC2000 to  find the subset that came public since 2015 (created a column with a formula c/c4 set to yearly; those with a result of  ** could not be calculated because they did not trade before 2015). I then manually looked at each monthly chart to find those that had hit an ATH and subsequently consolidated for at least 3 months.  I drew a green horizontal line at the peak price it reached before it consolidated.  I selected those that had a GLB (green line break-out, closed above its green line) recently. I also like to see above average trading volume the week of the GLB.

These recent IPOs are worthy of my researching for future purchase. The great trader, Jesse Livermore, liked to buy the first GLB (he did not use my term!) of a recent IPO. Note that if a GLB stock closes back below its green line, I sell it immediately. I may repurchase it if it closes back above the green line–see the charts of MTCH and SFIX below as examples of GLB failure and rebound. The 19 stocks from this exercise are, in random order: MTCH, PSTG, NTRA, NVCR, NXRT, TTD, TWLO, YEXT, SEND, SFIX, ROKU, RPD, SQ, CISN, CNDT, CABO, CVNA, APPF, ADSW. Below are weekly charts of a few of them. I sometimes tweet GLBs intraday when TC2000 alerts me. Follow my tweets–@wishingwealth.

By the way, while not a recent IPO (in 2011) , MPC had a GLB on Friday, perhaps reflecting strength in oil. Looks like a cup and handle break-out….

 

The GMI remains on a Green signal and the QQQ has reached the 35th day of its short term up-trend.

16 Stocks with a Green Dot Bounce from Oversold

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I prefer to buy up-trending stocks that have bounced from oversold levels and have resumed their advance. The green dot signal video tutorial, available at my TC2000 club, shows how I put a green dot on my daily charts. I ran this weekend a TC2000 scan that detected green dot stocks over $70 (I have more success with expensive stocks) that were recently very oversold. One of the 16 stocks that came up was CRM. Check out its daily chart below. Note the recent green dot and the bounce off of the rising 50 day average (green dotted line) and off of the lower Bollinger Band. CRM reports earnings on 8/28. Four prior green dot signals have worked for CRM but the signal can fail at anytime. A decline back below a green dot would be the spot for my stop loss or an exit point.

The other stocks that came up on this scan appear below. It will be interesting to see which of these stocks continue to rise. A lot depends on the general market’s trend. Note that I have not researched these stocks. This list is for educational purposes only and is provided to help others understand and evaluate this set-up. In late August I begin my course with 180+ university freshmen who will learn everything about technical analysis that I have learned since I was their age.

The GMI remains Green and at 5 (of 6).

 

 

 

RWB weekly strategy can keep me in a good position; $QQQ $SPY $GE $CAT $SQ

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Daily stock charts are good for determining entry set-ups and initial stops, but daily charts often mislead me and scare me out of good positions. Before I sell out of a long position I should remember to look at the longer term trends evident in the weekly RWB charts (see glossary). Once my entry set-up holds and I am not stopped out, I could actually just hold onto any equity in an RWB weekly up-trend pattern until the white band in the middle (the W in RWB) disappears.

This chart of QQQ shows that its RWB weekly up-trend pattern has never disappeared since 2017! The 6 shorter term moving averages (red lines) have remained well above the 6 longer term averages (blue) with a white space between them. The dotted line shows each weekly close. Sometimes the dotted line moves below the red lines but as long as the red white and blue pattern persists with the red lines above the blue, the advance is continuing. In fact, in a strong up-trend the equity repeatedly closes the week above all 12 averages. (The exact RWB averages are specified in my blog glossary.)

The SPY lost its RWB weekly pattern for a very short period, but it has now resumed.

A good rule for me is to never buy and to sell or sell short any equity with the opposite BWR weekly down-trend pattern. GE is a great example of a BWR weekly down-trend. Why would anyone ride this stock down after April, 2017?

CAT remained in an RWB weekly up-trend pattern most of 2017 with the dotted line (weekly closes) leading the other averages higher. Once the dotted line moved below the red lines and the red lines converged with the blue there was no reason for me to own CAT.  All stocks I buy or retain must be in an RWB weekly up-trends.

This chart vividly shows a complete advance/decline cycle for DDD from 2013-2015. It all looks so clear and easy in hindsight!

Why did I let myself and urge my son, sorry Mike 🙁  , to get scared out of his great pick, SQ which he bought around $11? I now know why–I focused on the daily chart.

I think the weekly RWB strategy can keep me in a good position and reduce the need to closely monitor and be stressed by the daily back and forth gyrations of any stock or ETF I own….

Meanwhile, reflecting the strength in the QQQ and its weekly RWB pattern, the GMI remains on a Green signal, at 6 (of 6).