@bridgewater here is the current chart of MELI, it has a nice little handle is it just breaking through.
How to Handle a Pullback to the Buy Point
Nice little nugget today. I summarized below the link.
Growth Stocks Investing: How To Handle A Pullback To The Buy Point | Investor’s Business Daily (investors.com)
About 40% of breakouts come back to the buy point
• How to you tell if you should sell or hold?|
• Your typical normal pullback will usually occur within days, rather than weeks, of the initial breakout. You should see a gradual price decline with weaker volume as the stock returns to or just below the buy point. A harsher decline that falls outside of these parameters, and you should start to consider cutting your position.|
• Familiarize yourself with IBD’s sell rules. If a stock has risen more than 10% from the buy point, you should sell it before all profits are gone. You never want to let a double-digit gain turn into a loss.|
• Familiarize yourself with IBD’s sell rules. If a stock has risen more than 10% from the buy point, you should sell it before all profits are gone. You never want to let a double-digit gain turn into a loss.|
• In the best-case scenario, a pullback allows the moving averages to catch up to the stock price. Your stock finds support and uses it like a springboard.
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Buying $ALKT. I bought the other half of my position today when it was 3% into the buy zone on strong volume. Probably could have got it 1% cheaper if I had looked at 1130 after I got back from yoga and before I took the dog to training. I thought retirement meant you had lots of free time.
In the chart below you can see where I bought originally (too high, too eager?) and then got stopped out where I sold at the red line. Then after support and bounce I got a 50% position (green line) just at the buy point, and then another 50% position at 3% in. (ok, I had to raise a little money for the last 1/6th position, and I had to buy that at 4% into the zone because some joker jacked it up while I was selling VRT).
Lesson Learned: I can get over excited and buy too late and too high like I did the first time with this. I had to sell and buy it back at a higher price than I sold. A lot of gap ups will give you a short down-tend for buying at a lower price. Bill always said that buy at the precise point was critical in avoiding getting shaken out later. His research shows that 40% of breakouts retrace to the buy point.
$VRT: I bought this in my IBD account, but it was not really using an IBD rule. It was in a strong run and the visited the 50dam and had a good bounce so I bought 1/3 position. This is the kind of thing that I should leave to my future SimonSez account.
Thanks for listening, talking out loud helps me learn.
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Yea it’s been very volatile today. I like the way you mark up your charts. Very informative.
Andy
@buynholdisdead Andy, I don’t think I saw this power trend video. I have read a few articles and seen people talk about it, but Mike may have been a key creator and I will watch this weekend. Thanks.
$HOOD is a chart worth watching. Had a great shakeout in the base and is now seeing accumulation.
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LOL I bought Hood today at $19.94
Yes Mike was one of the ones who invented it. He was talking about it today on X.
Andy
Some charts to peruse, especially if you have MarketSurge…
○ Some IBD stocks near or in buy zones: AROC, HOOD, AVGO, MPWR, CELH, NVO, ISRG, TOL, PHM, , BROS, PDD (they own TEMU), NFLX
○ CRWD is down a bit due to Palo Altos earnings report tonight, but it is building a nice base that should be watched. (Mike Webster says it really broke out a few days ago). CrowdStrike (CRWD) has teamed up with Google Cloud, aiming to transform AI-native cybersecurity. CRWD stock is poised to unleash a new breakout as it edges out PANW stock for top billing among cybersecurity stocks. On May 9, CrowdStrike and Alphabet (GOOGL)-owned Google Cloud announced the expansion of their existing strategic partnership. The enhanced collaboration leverages the CrowdStrike Falcon platform with the Google Cloud Security Operations platform.
○ ATEN: look at chart to see move after gap up (too late to buy) Look how the day after the gap up had a nice little reversal. Was that hinting at the strength to come? NEM, another gap up with a dip and then a take off. Also see SG gap, dip and pop.
○ VST: has seen a ton of accumulate (see the ants on MarkgeSurge). Today was a little messy. I am keeping it on my watch list to see if it will build a tight flat base, then with all the recent accumulation, the breakout could be very strong.|
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IOT has pulled back a little and is giving you a better buy point. IBD says these gentle pullbacks to the pivot point are a good time to pick some up. And IOT’s Fundamentals look good.
Andy
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This is VKTX. It’s a biotech that is in phase 3 of it’s GLP-1 drug and in phase 1 of it’s GLP-1 pill form drug. It also has a nash drug in the pipeline. This is high risk high reward but Look at the fund accumulation.
Andy
MNDY is a SaaS company. It has been Gaaping up since earnings. It is now at a pivot point. I bought a position today.
Andy
RE: CELH, yes, it looks good. I have that in my Saul-IBD sandbox.
RE: MNDY, also good, bought some on the gap up and some today in my Saul-IBD sandbox
RE: SMCI is a real company that feels like a meme stock. Its near-term performance will be 100% based on NVDA earnings Wed. I cannot buy either before the earnings are out. (As noted on other thread, I sold my NVDA in Saul sandbox and used money to add to CRWD and MNDY today).
RE: IOT. Yes, another good chart with good growth fundamentals. Mostly tracking trucks with GPS, but also has other IOT products, which will grow. I believe they have recurring revenues, which is important. I have this in my Saul-IBD sandbox.
*I am down to a few % cash in my Saul-IBD account and just sold one stock to get to 10% cash in my IBD account. I think there will be good opportunities if NVDA exceeds expectations, if not, cash is even better. AROC is on my hot list.
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@buynholdisdead Andy, Investors.com has a separate subscription (that I also have), but it has a lot of free stuff. I know you are aware and reading articles and watching videos. There is a “column” called “The New America”, which highlights smaller up and coming companies that are doing “New” things. It can be found under the Research link.
I try to review it but sometimes forget. Apparently on 5/16 they covered ALKT…
Online Banking: Alkami Stock Advances As Firm Turns Profitable | Investor’s Business Daily (investors.com)
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MNDY notes. @buynholdisdead I bought this on an IBD breakout in my Saul-IBD sandbox. I post it here to make some general points about IBD trading. One thing they advise is to do a post analysis of all your trades and then determine what is working and what is not. All traders should do this to be better. So I am working hard to do it right, and it is a bit of work. What I do is have a power point file that is created fresh at each new Follow-Through-Day. I track each trade and take notes to help post analysis later. I keep a journal of any adds or sales and my general logic on actions. Then, when there is a market correction and not much trading is going on, I try to go through all my notes and compile a summary analysis. Here is partially what my PPT looks like.
Here is what the notes section of my PPT slide looks like…
Post Analysis:
- Breakout Strength: strong +84% vol
- Base Stage: 2
- Right-Side Strength: very good just before earnings, during and after earnings report.
- Gap ups or shakeouts in base: earnings was a huge gap up above 50dma. There was some shakeout like action near the bottom
- Group Rank: 84
- RS: 86
- Trend Lines: 21dma just getting above 50dma on breakout day.
- WON score: 9/9
- Chaikin Power Guage: Neutral-
- Long Term Potential: very good, this enterprise SaaS product is the best in class and could spread to a large number of enterprises. Addition of AI features could spur growth.
**Sell Rationale: **
Profit/Loss:
Commentary:
- 5/21/24: bought this in the Saul account on a strong breakout with +94% volume and about 5.5% price increase. (Sold NVDA before earnings to fund it). 4 days ago, I bought in on the giant earnings gap up above the 50dma. (But that was more of a “this is one of the strong Saul stocks rather than it is going to be an IBD stock”.
Here is a snippet from an IBD checklist I like to use to remind me to look at the base before I buy…
and I note my observations in my bullet list.
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I sold my TQQQ yesterday and put it into alkt yesterday and Mndy today. I am looking at wing. They just formed a tight and I have wanted this one for awhile.
Andy
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That looks Great Pete. Very detailed, I like the way you are doing it. I have been writing them down in my journal but not that detailed. I need to start doing that thanks.
Andy
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I agree with you Pete but SMCI is the leading company in the leading Sector. It could get decimated by NVDA earnings call but I have 7 percent of my portfolio in it now because of its leading position. It is looking better.
Andy
