I am tempted to buy SPOT on the breakout today, but its fundamentals are not great yet. I want to talk myself into it being the Netflix of music streaming. Sales are a consistent 20%, but earnings are just turning positive, but are expected to be large this year. They just announced a price hike on subscriptions. RS is a blue dot. It bounced off the 50dma 2 days ago, but finished in the bottom of the range, so not a buy. Yesterday it jumped on strong vol and that was an “early buy” opportunity. With the market a little choppy, the wise thing is to pass, so what will I do? Hmm.
1 Like
Here is your Simon Says. It looks like it is still going down but it could be ready for a turn. It hasn’t shown up yet so it definitely isn’t a buy yet.
Andy
Dang Pete 30 percent management ownership. Strong Fund ownership looks good too. I just have to many stocks and have been trying to bring it down to under 10.
Andy
Hey Pete, Look at SMCI and Celh, tell me what you think of each of them.
Andy
From an IBD point of view, CELH is death! It is below the 50dma on heavy volume. Untouchable. If you like catching falling knives, see if it bounces at the previous low of 67.26.
SMCI: untouchable. Again, below the 50dma on heavy volume. Lots of damage to the chart. You know these violate the IBD rules, so if you are asking, maybe you have too much love for these and you are about to go back to that bad girlfriend that cheated on you.
As grampa would say “Com’on man!”
RE: SPOT - I did not buy, but regret it a bit. In the IBD video the covered SPOT and noted that it does not pay much in royalties, so this new price hike in the US could have good earnings leverage. Its COMP is only 89, which is good, but I am trying for 95+.
1 Like
It is a good exercise to bring you IBD holding back down below 10. As Bill would say, that forces you to cull your weak holdings and put the money into the strong holdings (or hold cash in this choppy market). Per IBD advice, I have a list of all my IBD stock divided in to 3 categories: 1) Strong/BuyMore 2) medium 3) Sell first. It is a good exercise to do. If you have more than 10 and you have some in “sell first”, then you know what to do.
I have the same problem, I max out then I start buying IBD breakouts outside of my IBD account. Essentially going on a virtual margin for that account. That is usually when the market tells me I was a fool for doing that 
1 Like
Thanks Pete, I have held them for a long time, much earlier then when I started IBD but I have been selling them down and just sold out of SMCI today and have a little bit of CELH left.
Andy
Sold the rest of my CELH today. Sold my Tesla and bought some Wing. Wing finally broke out of a tight pattern. I bought a little bit above the price I should have and went with a 10 percent position. Giving it more room to run also with a stop at 8 percent below.
Andy
1 Like
I like that you look at the weekly charts, Bill prefers to start that way. I have been liking wing for a while and waiting for a spot. On the daily, it is breaking above some resistance on strong volume while also coming off the 50dma. It looks like there was a sell off day after earnings, but the 50dma provided support and price finished in upper half of range. That tells me weak holders left and strong holders came in. So I am in, thanks for the heads up.
Note: a weak holder is not a bad person or a flawed person. For instance, a swing trade had tight stops and when those are violated, they leave.
Edit: meant to say restaurants are doing well for some reason. Their IBD group is ranked 17 of 197 groups. CAVA, SG, EA, BROS. BROS broke out on huge volume and is past the top of the buy zone today.
Happy hunting
2 Likes
I noticed that too today Pete. Livermore would say if you see two or more stocks breaking out in a sector that it is a strong move and something to be invested in. I put SG and Bros on my watchlist.
Andy
ASML made a big sale to TMSC today and that caused a big jump on volume. On the weekly, the RS shows a blue dot. High volume today. Decent IBD rankings. Got some ants back in Jan/Feb, those were big institutional buys and the idea is they won’t be supplying their shares to the market, so direction is up. I might open a position tomorrow, need to review other opportunities.
NVDA just can’t be stopped, no one wants to sell. It is up 25% from the buy point in about 8 sessions. This activates the 8-week-hold rule if you bought it at the breakout.
ALTK fell close to the 50dma, then recovered to just below the 21dma on higher volume. I will take that as a sign of support for now, it remains volatile.
SoftBank (SFTBY) is breaking out. Shares of the Japanese holding company are trading sharply higher on news that activist investment firm Elliott Management has acquired a position. They are pushing for stock buybacks, I thought I saw $15B on CNBC. Also thought I saw their ARM holding was valued higher than the entire company, but that does not seem right. They might still have troubles with WeWork.
You want to put this stock on your watch list. It has a good sector rating and the funds are gobbling it up. The growth rate is very nice also. Although FSLR is best in breed this stock comes out second and is close to a pivot point.
Andy
“It looks like Hood is finally breaking out.”
Andy,
Look at HOOD on a longer term chart. It’s not “breaking out”. More likely, it’s getting ready to roll over again as it has done before in a very clear, “rolling waves” pattern.
1 Like
Charlie that pattern looks like a clear pattern up with a consolidation period after each pattern up. Is that how you would see it?
Andy
Some reading material here if anyone is interested.
The purpose of this thesis is to assess if the trading strategies created by Reinganum (1988) still outperform the S&P 500, and to test whether the same methodology of investigating shared characteristics among winner stocks is effective for creating a trading strategy in the time period 2000-2019 on the U.S. stock market. This thesis singles out stocks with a rapid price appreciation and analyses their shared fundamental and technical attributes. The analysis identifies several distinct features among the stock market winners, which are utilized to form the basis of an investment strategy. Previous research of stock market winners has mainly focused on how to identify stocks expected to rise significantly over longer time periods, while research addressing shorter term price acceleration is limited.
Andy
Charlie, Andy is probably looking at this from and IBD “position trading” point of view. The long term chart shows HOOD has been heading up since late 2023. The green earnings line shows the accelerating earnings growth that is driving this. My red line (and MarketSurge blue box) shows where it just broke out from a Stage 2 cup. The rollovers your chart shows since the breakout in February are insignificant for position traders. There were no sell signals and someone buying in the Feb breakout at would still be holding with at the $13.51 pivot price would still be holding today at $22. It just depends if you look at the world as a swing trader or position trader or day trader. They can all be right in their world.
2 Likes
“It just depends if you look at the world as a swing trader or position trader or day trader.”
BINGO! That was exactly my point, that from another point of view the stock wasn’t yet “an opportunity”. As Andy said, he wouldn’t be buying here, nor would I, nor would anyone but someone trying to trade the micro trends.
But also, no one trying to trade the micro trends would be hanging out here in this forum. (Likely, they’d be over at EliteTrader or in one of the many chat rooms devoted to day trading).
1 Like
Right Arindam but a position trader wouldn’t be buying here either. It has already left the station. But I bought on 6/3 and 5/17 with a stop at $18.54. Not to shabby so far.
Andy
Hi Pete I know you probably already know this but I wanted to point this out. When going through IBD charts on a stock it tells you what sector each stock is in. If you click on the sector (Upper left portion of screen) it will take you to the sector overview. You can see how it has been moving up or down. Notice this sector, we are definitely having some movement in the sectors.
I was looking at MU and it has it in the computer data storage sector which is number 4 now. But Qualcomm is in the Electrical Semiconductor Fabless which is number 3 right now. I believe MU also plays in that sector. So just wanted to point out how we are getting some rotation.
Andy
1 Like