Trading IBD Stocks

[PuddinHead42]

The market turned ugly today, and with the current distribution day count of 7 on Naz and 6 on the S&P, I figured it was time to raise some cash. Current recommended exposure is 60-80%, but with the size of today’s decline and the much higher volume on the Naz, I would be shocked if we don’t get downgraded to 40-60% and I would not be shocked to see 20-40%.

I sold the following holding in my IBD account: NVDA, GVA, VIK. Almost sold VERX, but held off.

For my HTF type of spec stocks, I sold: HOOD, RDDT, CRDO, ALAB, PSTG. I think those are all good stocks and will look for opportunities to reenter when the market seems more stable.

Sold a couple other non-related items. This seemed like a market expectation breaker and I wanted to reduce exposure.

[buynholdisdead]

These were looking strong today. They are in China.

VNET

GDS.

[PuddinHead42]

@buynholdisdead

They are in China.

That’s too hard for me now, with Trump and the Chinese economy, I am too worried. That said, China basically says they are going to make everything all better, but we’ll have to see.

The HTF candidates I sold today are still in the flag and could be actionable if the market comes back soon.

I like CRDO because it supports AI datacenters and the FoxConn report said they are making AI servers like crazy. That should help ALAB too.

[buynholdisdead]

@PuddinHead42

I like CRDO because it supports AI datacenters and the FoxConn report said they are making AI servers like crazy. That should help ALAB too.

They are in the same sector as CRDO. China has been beaten up so much and I am just wondering if their Data Centers will have a big boom this year also.

[PuddinHead42]

I was leafing through the 100 charts in Bill’s book and opened it to the Yahoo chart (1997) on P.90. The N in CANSLIM stands for New. New Product, New CEO, New Trend. That is, look for something that has the potential to be the next big thing because of its newness and innovation.

Anyway it was this note on the chart that made want to post.

“Another innovator in the new internet. Everyone benefits from incessant new ideas and concepts on the internet, and there is more coming in the future.”

Just like AI. Years of growth and profits to come. Just need to find the right stocks that are going to see the huge growth.

S.S. Kresge 1923

The mid-1920’s was a transition period from mom-and-pop stores to business owned retail chains. S.S. Kresge grew from 233 stores in 1924 to 451 just 4 years later.

and then Walmart, Home Depot and Costco. And then Amazon, Ebay, Shopify. History repeats, or at least rhymes.

One thing I see repeated in the chart notes is "…raising the standard of living for Americans". When a company is doing this, everyone wants what is selling and that translates to big returns.

[PuddinHead42]

As mentioned, made some sales as the market got worse, wanted to reduce exposure.
Post Analysis:
$VIK closed out with a 7.68% profit. My initial buy(s) was coming out of a stage 1 IPO base and it made good steady progress, easy to hold. I was at almost a full position very quickly, something I have been trying to improve on. The last 3 buys amounted to a 1/3 position dollar-wise. Maybe that was too big.

I should have sold all my recent buys when it closed below 50dma. Then I could have held out on the early, very profitable buys. There was also a big shakeout followed by a big upside reversal. That got me to buy more, which was not a mistake, two of those 3 buys were on good upside reversal days.

If it continues to build this base and breakout in a strong market, I would be willing to buy back in.

[PuddinHead42]

These are holdings of mine that are showing strength and worth watching if the market stabilizes

A number of them are finding support or continued support at 50dma. META is positive for the day on an upside reversal (I might add a small amount). GEV had an upsdise reversal. SPOT tested the 50dma and reversed up, but not as much as GEV or META. Note the RS rating on each.

Also see: CRDO, PSTG, BROS, GEO, RKLB, PLTR, VST, NBIX, FTAI

[rdutt]

Yep. I own VST, FTAI, META, ONON, MELI, and UBER, and noticed they all ended in the green. FTAI, in particular, has broken out and hit a new ATH. However, I also own NVDA, APP and RDDT which were all down 3% today. Overall, I was down 0.9% on the day.

[buynholdisdead]

Areas holding up.

Medical Biomed/ Biotech stocks holding up, GMED etc.
Transportation airlines UAL etc.
Utility-Electric GEV etc
Oil & Gas AR etc
Aerospace Defense ESLT etc
Oil & Gas Pipeline FRO etc
Leisure Gaming/Equip PENN etc

[PuddinHead42]

@buynholdisdead

Transportation airlines UAL etc.
Utility-Electric GEV etc

$GEV I had drawn a dashed alert line while price was below it, and it triggered on 1/3/25 with that nice upside reversal day. I kicked myself for not adding per my plan.

I added the next day on continued strength, but some might say I was chasing it. Wednesday I sold or trimmed a lot of stuff, but GEV held that dashed line. But on 1/8 it came back down to the dashed line, found support and reversed up, so I added 1/6th of a position (I am timid in this market). It had the same fall, support and upside reversal on Friday 1/10, but I resisted adding more. With Naz falling below 50dma.

$UAL: Webby (or someone on IBD) had pointed out the downtrend line, shown in chart below. Once again, I failed to buy a very strong stock on the move above that. Why not a small starter position. Perhaps the message coming from my eyes said leave it alone.

Maybe if it tests $100 and holds and bounces, I should start a position.

I have been accumulating META and it has been doing well in this bad market. On 12/20 I added to my position on an upside reversal, but it fell back down so I sold that position the same day while hanging on to previous positions.
On 1/3/25 I added a tiny bit, but on 1/6 I added a third of a position and then Friday I added a small about as it bounce off the bottom while the markets were sinking. I like to buy these signals of strength, but maybe it is better that I put them on a watch list for when the market bets better. Maybe I have a need to buy something and just can’t resist.

$SPOT was somewhat the same as META, it had bounced off the 50dma and was looking strong when I added Friday, but it did fade badly at end of day and closed at the bottom of the range on the highest vol in a while. I had also added a small amount on 1/8 on the strong upward move that day.

I am biased toward SPOT and believe it is looking like a mini-Netflix. It the best in breed, is growing sales and earnings very well, and has been able to raise rates. I really want to be able to hold this long term and make it a big position.

I will try to post my sales and trims from last week soon.

[buynholdisdead]

Watch Cava too. It looks like it is forming a cup and it is still early in the base. Might want to watch for a pocket pivot point. It’s sitting on the 150 day sma.

Edit: Better to watch for a pocket pivot on the daily.

[PuddinHead42]

@buynholdisdead

Watch Cava too. It looks like it is forming a cup and it is still early in the base.

Yep, I drew in the cup on my “vision board” about a week ago. See the future, be the future.

I am about break even with CAVA, but I really want to hold it. I will probably make a bad decision. If MF had told me to buy it, I would have just held it 3-5 years without thinking about it.

[PuddinHead42]

I am going to think out loud here and wonder why I did not sell CAVA when it broke below the 50dma on huge volume.

Excuse 1: I was still very positive at that time, I could withstand a little time below the 50dma

Excuse 2: I have great faith in CAVA’s long-term growth, so I should hold.

It is easy to see this in retrospect, but that is all we get and I think it is useful. Here are the reasons I should have sold that time, and maybe at similar times in the future.

Reason 1: This is a major move below the 50dma on huge volume and the stock closed at lows for the day. This is a classic IBD sell signal.

Reason 1a: clearly major institutional selling is going on, I should not try to fight that.

Reason 2: That day where it went to $172 and fell back to barely even was a big warning sign. All that huge volume is really negative, this was really a sell day. It was a big downside reversal and a change of character. Combine that with the drop below 50dma and any 8-year-old could see the storm acomin’

Reason 3: If I was wrong and it came back above the 50dma, there is no reason I should not buy it back. I would only miss out on a few percentage points for not holding and hoping. (There are plenty of stories where Bill sold a big winner or a big winner to be and then bought back at the next correct place).

[PuddinHead42]

Today I sold 50% of ONON just to reduce exposure, would love to buy it at a higher price in a strong market.

I used a portion of that to start a position in BKR on its decent breakout. Barely in buy zone, may put in a stop-buy for a higher price. I like a little more energy exposure here (have GLNG too and NFE in non-IBD account)

Bought 2/3 of a position on WIX very strong breakout. COMP 99, Blue Dot RS of 95 high volume. Should not be buying in a bad market.

I bought MMM in my Value/Turnaround account after that blow-out quarter a bit back. Bill Brown was my old CEO and knows how to squeeze blood from a stone, so I have faith.

This could easily be on your TA/IBD watch list as it had a long flat consolidation is nearing a buy point.

[PuddinHead42]

IBD said this

a relatively large number of stocks flashed buy signals, including Vistra (VST), Howmet Aerospace (HWM), Wix (WIX), Argan (AGX), Planet Fitness (PLNT), Ubiquiti (UI), Sea (SE) and Snowflake (SNOW).

Homework for newbies, look at each one and see what “buy signal” IBD is talking about. I find the signal for SNOW pretty iffy.

[PuddinHead42]

Added final 1/3 to WIX, added small to SPOT, added to VERX on high vol move above trendline. META could be a buy, but my position is big enough. Not buying back ONON because it is not looking strong enough. GEV moved out of buy zone, but it is strong, trying not to chase. HOOD had a great move +56%vol, I could justify calling it a breakout. Really like that company.

Looking at Financials breaking out to diversify from tech: AXP, JPM, DFS.

Housing popping.

[PuddinHead42]

WIX is looking strong. Broke out in down market Tuesday and up again today. RS 95, should have had a blue dot. Comp 96, but EPS only 74. Vol very good last 3 days. Stage 4 base is a worry. Fund ownership is slowly growing, but highly successful growth funds hold it.

I bought SPOT on a stage 4 breakout in Sept, and it is building another Stage 4 on this base (because it did not go up 20%). Just added small today because it was breaking above a recent high I had market. It is nearing a buy zone, where I would add bigger. Earnings due 2/4, so I would sell my new shares if it tanked. Fund ownership has been growing nicely.

VERX I was contemplating selling half yesterday but decided support at 50dma was enough to hold one more day. That was lucky as it jumped off the 50dma and above a down trend, so I added 1/6 more to the position. Fund ownership is growing well. COMP99 RS95. Strong like bull. But, this is another Stage 4 base. What am I doing!

$BKR is in the oil services business and give me diversity from tech. Was breaking out on market down day 1/14, bought 1/3 position. strong IBD ranks, RS91. Stage 2 base

Bought 1/2 position in $AXP today, big market day with cool CPI and strong bank earnings reports. Stage 3 base, RS90 with blue dot. COMP94. Diversity from tech holdings as well.

Might add to APP, might rebuy HOOD and RDDT if market improves.

[PuddinHead42]

$DUOL strongly moving above downtrend, gapping above 21dma. Has 21dma above 50dma, so held up in downturn. RS92, +138% volume.

$DTM is another highly rated stock breaking out on decent volume. NatGas pipeline (toll road). RS95. 21dma above 50dma. Shows a high volume up day a few weeks ago.

Add to watchlist

HTF-like. Lesson to learn…It broke above highs on strong volume, then market hit a road bump. During that time, it did not lose much, then it retook those highs. That was the time to buy, now you would be chasing it.

I hate $VITL because they charge 2x for pasture raised hen eggs versus Trader Joe’s, but apparently they are making a ton, so someone may want to buy it. I think the avian flue may be helping them keep prices up.

$CVNA hot while ten year rates fall. Breaking above 50dma, but big moves over last few days.

Some of these tempt me, I may post some new buys after I walk the dogs.