Sunday, December 21, 2008

Analyzing Possible Picks

In preparation for Monday's trading I went back to the last three days of Stock Assault picks in order to see if I am too late to catch a ride on one. I analyzed ELY, CVX, DO, TTWO, CEC, NWL and MO. I first looked at the market's interest in the stocks by seeing the volume of their last trading day versus their 90 day average. ELY volume was up 58%, CVX up 44%, DO up 31%, TTWO up 159%, CEC down 4%, NWL up 45% and MO up 33%.

There is certainly a relationship to be drawn from volume and pricing, and it can be bearish, bullish, or neutral. When volume is way up, and the stock price is going down, then we have a confirmed bearish relationship. I found this in ELY, CVX, TTWO and NWL. I did not find this in DO, CEC or MO. If you look at chart #1 for all of these equities, you will see this volume-up price-down pattern four those four stocks.

On chart #2 you will see that slow stochastics confirms by the downtrend in %K. These will not be buyable until we see a %K bottom, confirmed by an upturn. However, you will notice on chart #2 for on DO,CEC, and MO we have an upturned %K on MO and CEC, but not DO. In fact CEC is overbought and due a pullback. MO looks like a buy here, and DO is a strong buy here.

I will be looking to see how Monday starts, but with the news of OPEC choking production to raise oil prices, the eventual outcome will be much higher oil, making DO a good hold for a while. MO looks good to go also. Of course, I'll be waiting to see SA picks for Monday also. Anyway, just trying to give you some insight as to how I sort through things.

Have a good one,
Roger



























12 comments:

  1. Roger,

    MO was a fantastic pick that SA picked up not once but twice as an A+. Apparently it was liked so much that when I asked about the double pick, it was only if you didn't look into it the first time, then it was a buy recommendation the second time around.

    Turned out to be a good sign as the first time around, I purchased some options on MO.

    Sold them at a 40% gain and probably could have seen it go much higher.

    I've noticed that A+ picks are really quite strong in SA. Even if they dip down, they seem to come back quite well. The other ratings, you have to watch closely and as always money management is key.

    Thanks for the detailed analysis.

    I too am looking forward to see what Stock Assault has in store for Monday.

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  2. Hey Roger,
    Thanks so much for all the information and tips along the way. It's been so helpful to see how you've made trades and what you look for before entering a trade. Overall I've been incredibly impressed with Stock Assault. One thing I've noticed is that quite often on the picks, Stock Assault is predicting an upswing about to occur. The opening price on that day often has a pullback that takes it a bit lower before beginning the upswing (especially in today's market). So, if you wait about 1/2 hour to an hour after opening, or just watch through the day, you can usually get a lower price than the opening one, and sometimes it's good to wait a whole day before buying so that you get it closer to the real bottom on the way up. Sometime Stock Assault is remarkably early in predicting the upswing before it happens. You're almost always fine to buy at market open, but if you want to pay attention to more detail you can usually catch a lower price that occurs later in the day or even very late in the day depending on the stock's trend and the market's trend. Anyways, thanks again for all the tips. It's been so helpful! Just wanted you to know that you do have readers! Have a great day.

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  3. The greatest thing about SA is the signal before the trend begins, which was something missing in all the other stuff I have used. I have seen so many programs signal after the trend, and before you can get a piece of it, it's over. Glad to know that I have readers, it makes it all worthwhile. Also, even though I may seem to pass on stocks that don't fit my criteria doesn't mean that they aren't viable picks. Several times I have waited on what seemed like a dive in %K only to be fooled. That's what so great about our ability to choose : it fits our own personal trading style, whether it be equities or options.

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  4. Roger,

    In this insane U.S. market, Stock Assault has proven to be pretty good. While some of the grades are off (Diamond Edition shows one thing and the website shows another) overall...

    It's been pretty darn good.

    SA didn't pick any reverse ETFs today and what looked like a plunge and "Gosh I wish I had some SRS or some other reverse ETF" turned into a...

    PHEW! Glad I didn't do that. As the DOW made a questionable 100+ point recovery in a matter of minutes.

    Granted, today's picks were down but in the next few days it could be a very different story.

    Keep posting bud. I'm a faithful reader.

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  5. Hi Roger,
    One other quick note that I've learned (the hard way mostly) is to do a quick check of news regarding a particular stock (like using finance.yahoo.com or google finance while searching for a stock). Even just noting headlines. For example, MO, while a good stock long term and with good dividend payback, is being hit hard because of a recent supreme court ruling regarding legal cases, and the coming lawsuits this will bring. Also, MO was a sell on Friday. Also, CTAS, one of today's picks just released lower profits than expected and forecasted earnings were lowered by analysts. The stock price dropped today (along with a ton of others thanks to the bears and light volume). Furthermore, JWN (Nordstroms) is a retailer and that segment is being hit really hard right now. So, just some tips on taking a quick glance at headlines before purchasing. Good stocks will generally rebound from the initial selloff that comes from bad news, but when you're trying to make short term profits, sometimes you can't wait that long. Lawsuits and analyst downgrades almost always spark short term drops. Also, here's a couple sites I use for quick analysis: www.stockta.com to get a fast glance at where support and resistance are - and there's a ton of other quick analysis available, all free; and www.askstockguru.com, again for a quick glance at support/resistance, trends, and overall company strength. Both sites can give simple and free glances for an initial look at a stock. Thanks again!

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  6. Roger, what a great blog and I am sure your friend is excited about your hard work and use of great tools such as SA. I just purchased SA diamond 2 days ago and haven't actually purchased a buy signal, but watched the action today. Is there any way I could follow you in real time so that I could learn how to use SA without making any costly mistakes, as I am convinced SA if used prudently can produce profits. I have 35K that I would like to invest using SA to make some serious money and I am willing to take the necessary risks. Thanks again for your blogs and keep them coming. If you are interested, I don't exactly know the best way to contact each other without posting email info or such.
    Tol

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  7. If we have to look at the news before we go ahead and act as per SA recommendations, isn't that called performing fundamental analysis?

    Doesn't that defeat the purpose of SA?

    Isn't SA supposed to provide the best picks without asking questions?

    Thanks Roger.

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  8. Hello, I don't know of any way to follow me in real time as of yet, but I have often pondered that idea as a personal venture. For now I believe it has to be delayed on a post by post basis. Thanks to everyone for all the nice words as they mean alot to me. Also,reading the news on a stock is very important to one's buying process, and I appreciate that being mentioned. Good trading to all ! Roger

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  9. Try Investopedia.com they have a stock market simulator!

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  10. The AI of StockAssault can do alot, but it cannot read the news. It is possible to see a pick triggered by a move in price and volume that is due to some factor other than the normal market fluctuations. That's why research is needed,such as the news,or fundamental analysis as pointed out, in order to properly choose a course of action. I would never blindly purchase an equity on any programs or persons recommendation without first doing my own research. This in cludes the current market conditions. Many times I will wait to pull the trigger simply because I know I can get it cheaper because of an impending down day in the market. Again, it is up to doing a little research. Does it defeat the purpose of SA ? Beats me, but as far as I'm concerned the purpose is to make money, and anything I can do to increase that chance I will do. I just know that this program has consistantly out performed other programs out there. I use it to alert me to stocks that I otherwise would never have found. The rest I do myself, but that's just me. Have a good one, Roger

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  11. Roger, why is DO a "strong buy" when the stochastics show quite a down turn?

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  12. This was my personal rating based on what is now a %K of 16.6 (extreme oversold) crossing above %D of 13.0 (generally signals a buying oppurtunity). also based on the impending rise in oil prices. Resistance is 70.10, which should be an exit unless it breaks through, indicating another leg up. I will sell when %K stops moving up, or just before resistance is reached. I like to buy when %K has bottomed. Some people buy when stochastics is already up. It's just my opinion.

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