The final list of double screened output for last week resulted in 58 charts with multiple buy signals, and 25 with more than one sell signal. These numbers reflect a rangebound but volatile two way market. Meanwhile, on Friday alone there were 16 buy signals and 11 sell signals.
Considering that there are over 10,000 stocks in the screened universe, these are small numbers. The tilt to the buy side is insignificant. I see no reason to get excited about the market’s direction, either way. Non-subscribers click here for access.
Regardless, my task is to unearth trading opportunities, regardless of the environment, so I undertook the usual visual review of the 58 multiple buys and 25 multiple sells. When I reviewed the 58 buys I was underwhelmed. Except for one chart, none appeared to have the potential for a sustained swing. I did pick the one chart to add to the list, XXXX. Non-subscribers click here for access.
That will leave us with XXXX and XXXX on the long side. Really, I couldn’t make this stuff up if I tried. Non-subscribers click here for access.
Then I reviewed the 25 short sale candidates. What I found was ambiguity. Many of these stocks had already been pounded into the dust, and did not appear to have the potential for significant downside swings in the short run. Part of the problem is that stocks that have dropped from triple digits to mid to low double digits play tricks with your eyes on the scales. It’s difficult to conclude that they still have significant percentage downside. It would appear that they need to bounce first. In some cases, they’ll just slither lower, but I’m loathe to try to pick those because of the potential for vicious dead cat bounces. Non-subscribers click here for access.
That’s a long way of saying I added no shorts to the list this week. The time has come for summer fun, and patience, waiting for better looking setups. Non-subscribers click here for access.
The screen results come from a universe of approximately1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. I start the weekly process by screening for daily buys and sells from the previous Friday through Thursday. I then rescreen that output, for additional signals in the progression on Thursday and Friday. Non-subscribers click here for access.
The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options. Non-subscribers click here for access.
Last week I had said, “Nothing doing,” as I eyeballed the charts that the screens had spit out, and saw little opportunity either way, except for XXXX on the long side and PUMP on the short side. Well, PUMP got stopped up, and XXXX sprang xxxxxx, and it was all we were left with. Non-subscribers click here for access.
With PUMP stopped out early, and holding only xxxx until the end, last week, the list of two had an average gain of 6.8% with an average holding period of 8 calendar days. As always, that includes both picks closed during the week, and those still open on Friday, in this case, just the one. Non-subscribers click here for access.
Picks closed out in June averaged a gain of 10.1% on an average holding period of 17 calendar days. That works out to an average of 4.1% per week. There were 12 closed picks. The win rate was 75%. I would hope to continue that, but it is by no means a given. Non-subscribers click here for access.
June’s performance is not something we should expect to duplicate too often, if at all. The average weekly gain since I tweaked the methodology in mid January is just 1.29%, while trending upward lately. Non-subscribers click here for access.
6/6/22 Picks closed out in May averaged a gain of 3% on an average holding period of 2 weeks. That worked out to an average of 1.5% per week. There were 28 closed picks. 25 were shorts. Non-subscribers click here for access.
5/9/22 April was a challenging month. The final tally of closed picks in April had an average loss of 0.4% with an average holding period of 11 calendar days. My system does not do well when the average low to low cycle duration drops below 4 weeks. Non-subscribers click here for access.
March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 calendar days. Non-subscribers click here for access.
This week we start with 1 open pick, a buy with the symbol XXXX. I’ve added a stop to it at a trigger level that would suggest that the stock will not head up after all. I added it without a stop in the first week, as usual, to give XXXX a little wiggle room to develop into something more tangible. Non-subscribers click here for access.
All active picks and those closed out last week are shown on the table below. Charts of new and open picks are below that. Non-subscribers click here for access.
The strategy and tactics opinions expressed in this report illustrate one particular approach to trading. No representation is made that it is the best approach, or even suitable for any particular investor. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit.
Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time. I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price.
Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.
The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.