Judy’s Picks

GMI: 4; GMI-R: 8; CPST rocks; ITRI-another Judy’s pick; RSS feeds

@ 12:13 am

The GMI is at 4 (of 6) and the GMI-R is 8 (of 10).  There were 63 new highs and 31 new lows in my universe of 4,000 stocks on Wednesday.  Wednesday was the 7th day of the new QQQQ up-trend.  With my general market indicators in positive territory it is time for me to accumulate stocks again.  I am buying QLD and selling covered calls on IBD100 growth stocks again.  I am getting 4-5% premiums for calls that have only 12 days to expiration….

Meanwhile, CPST, one of Judy’s picks, keeps hitting new highs on heavy volume and is up almost 14% since I wrote about it on March 28, at $2.09. CPST makes microturbines and appears to be  pulling in contracts from around the world.  As a rule, I do not buy cheap stocks, but I made an exception for CPST, based on its great chart and Judy’s advice. Judy had bought it around $1 per share.  Another Judy’s pick that showed some life on Wednesday is ITRI, which makes smart meters.  I automatically purchased some ITRI today when my buy stop was triggered around $97. By placing a good-til-cancelled buy stop at the level I think is indicative of a break-out, I can buy promising stocks without having to watch the market.  One does not need to be glued to a monitor to catch stocks breaking out of bases…

To my honors students taking part in the virtual trading competition–it is time to close out your shorts and go long. Pyramid up on margin as long as the QQQQ up-trend remains intact.

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Notes from Mr. Wish (Dr. Wish’s  IT Guru son):
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– hope you like the new design = )

GMI: 3; GMI-R: 6; Day 2 of QQQQ up-trend; CPST–a Judy’s pick

@ 12:01 am

The GMI is still 3 (of 6) but the GMI-R fell one, to 6 (of 10).  This is because there were  only 27 new highs and 28 new lows in my universe of 4,000 stocks on Wednesday.  The indicators in the GMI have kept me out of all major market declines since 1995,  including the bad markets of 2001-2002.  I then got back in the market in 2003  and my account was up over 50% that year.  I also avoided the decline that began last January, which lasted 55 days.  The new QQQQ short term up-trend is in its second day and I am beginning to wade into this market slowly by buying QLD and writing some covered calls.  If this up-trend should end quickly, I will get out and go immediately to cash again.  There is always time to catch a real up-trend that can last months……. 

The service that I use to scan stocks for writing covered calls is at www.poweropt.com. I like this service because I can narrow down my scan to include only IBD100 stocks.  The IBD100 stocks include the strongest stocks based on fundamentals and technical action as assessed by IBD.  I also eliminate stocks that will report earnings during the option period.  I was burned several times by writing covered calls on stocks that announced earnings and then plunged.  In a market up-trend writing calls on growth stocks with large premiums is the easiest and least stressful way I have ever made money in the market. Joseph Hooper’s book educated me about this new way to look at writing covered calls for income. While I do not follow his method of stocks selection and technical analysis, I do like his philosophy of writing near month covered calls for 3-5% income each month.  I do all of this trading in my IRA and do not have to worry about taxes.  Check it out…

My friend Judy, who is the best stock picker I have met, buys stocks based on concepts long before the technical action meets my requirements. Cpst
When she told me about this stock that she bought for about $1 per share, I told her I do not buy cheapies. But the stock has been rising, so I bought some around $2.09.  CPST makes microturbine engines and appears to be getting a lot of contracts.  If Judy likes a concept, it is good enough for me–as long as the chart looks good.  This weekly chart shows that CPST is now holding well above  its rising 10 week average (dotted line), which in turn is above its rising 30 week average (red line).  As long as the stock holds above this dotted line, now at 1.73, I will hold the stock.  This is not a recommendation, just an example of the chart pattern I look for and how I limit my risk.  By the way, most recent volume spikes are occurring on up weeks, suggesting strong buying. So, again, Judy buys at a price much lower than I do… 

Newdisclaimer

GMI: 0; GMI-R: 0; Nibbling a little at rocket stocks

@ 12:01 am

The GMI and GMI-R are still zero.  This means that most stocks are in a down-trend.  I have therefore been on the sideline for most of the decline.  There were 22 new highs and 174 new lows in my universe of 4,000 stocks on Friday.  The Worden T2108 indicator stands at 41%, in the neutral range.  The markets have been in a tight range since the January decline, going back and forth.  At the same time, a small group of sectors and stocks have been rocketing up.  It seems to me it may be prudent to nibble a little at these strong performers.

I therefore ran a scan using TC2007 to uncover IBD100 stocks that have been incredibly strong throughout the general market’s decline. The following stocks from the IBD100 lists I have monitored over the past year hit a new high during the past week and meet my strict technical criteria for rocket stocks:  MOS, MTL, CF, SID, POT, PCLN, CMED, RRC, PRXL, OIL, SWN.  While not an IBD100 stock, I also like FDG, which this monthly chart indicates has had a high volume break-out to a new all-time high, breaking its peak from September 2005.Fdg  In fact, this monthly chart of FDG looks like a three year cup-with-handle formation.  My smart stock picker friend, Judy, is interested in RIMM, which just bounced off of its 30 week average. (She, of course, started buying it in the low 80’s!)  I may nibble at some of these stocks and place close stops in case they reverse. Many of these stocks have rich premiums on their March call options.  I may buy some shares and immediately write March calls.

Newdisclaimer