Andy, I do not subscribe to IBD live, do you? They do a Tuesday review video of Swing Trader (with Mike) and every now and then they give free access to an IBD Live video or small segment talking about a stock.
After a big jump like that, they like to see a stock consolidate in a “flag” pattern, then when it convincingly breaks out of that it is a buy, or maybe an add-on buy.
No I don’t subscribe to IBD live either. I saw the small segment with Mike today and he and Jason both said they bought FLSR. Thanks for the information on the flag pattern.
Andy
○ Breakouts from: ASML, OLED, AVGO (which then soared 15% after hours, shooting it well above the buy zone. But breakaway earnings gaps are actionable up to 5% above their opening price per IBD dogma)
||○ Some of my watchlist stocks jumped out of the buy range before I could buy them: LII, GVA,
||○ IBD stocks to watch: BKNG, ARM, ELF (added to Leaderboard), ANET, SPOT
I added small to CAVA and ERJ yesterday, I bought initial position in NXT and added today. Bought 1/3 position in ORCL afterhours last night. Bought a 50% position in ARM today, though it can’t be technically justified. It is approaching a buy point where I could add the other 50%.
IBD counts 1 distribution day for Naz and 3 for S&P. Recent moves on the Naz erased 3 dist-days after moving 5% above those closing prices. Still in a power trend, but Naz is extended from the 50dma, thus increasing probability of a reversion to the mean. Recommended exposure is still 80-100% for position traders.
Here are some stocks Mike Webster discussed in the Friday video…
○ 11:35 AAPL - Even if you don’t want to trade AAPL, keep an eye on it and the other Mag7 since they are driving the market. Mike bought in a little of the $200 level.|
|—|—|
||○ 14:05 ORCL - Broke the downtrend on the RS line, constructive. |
||○ 16:04: AVGO - up 23% for the week, mostly after earnings beat. Would like to see a drift down to buy, but not too far into gap. We like upside reversals because it gives you a clear stop loss price at the bottom of the range.|
||○ 18:45: NFLX - |
||○ 20:25 - SPOT - Broke out of a sloppy base, so had to resolve itself. So it has been wedging down from the breakout and just took out yesterday’s high and the associated downtrend. So this is actionable and if it goes back into the buy zone that is a place you can add. Your stop is at the $300 level, which is yesterday’s low.|
||○ 22:20 DECK - about to test to low of the earnings gap up, which coincides with the big round $1000 market, and the 21dma. Always good when you have multiple areas coincide. Mike likes to wait for it to prove itself. Will start buying if it goes over the downward trend line and would add as it goes higher. The shoe group is ranked #8, so it has a lot of strong friends. Gives you diversity from AI as well.
SPOT and DECK are the ones to watch…
@buynholdisdead Andy, in the IBD Friday review with Webby, he showed how to build one of his favorite screens. This one find big, liquid stocks, with strong fundamentals and in uptrends. He then shows how to narrow it further to find those close to the 21dma. He sorts by 50 day average $ volume.
They review DPZ and PINS. (Separately they review CRWD and NOW) - worth watching. Starts at the 42:35 market.
Here are the screens…
Thank you Pete I appreciate that. I was at the beach last week with limited access so missed a lot of content that I am trying to catch up to.
But I did catch a Halibut so there is that.
Andy
RE: MU and SIMO. MU still showing strength and continued up trend. I considered selling SIMO but decided to see how the tight consolidation worked out. I told myself I would buy more it it resolved itself by moving into the buy zone again. It did, and I added some.
RE: 21dma upside reversals. After listening to Webby this weekend, I looked at my holdings and annotated charts with related plans, e.g. “watch for 21dma upside reversal and buy more”. Well, it came true for ONON and AVAV today. Hmmm, must be related to the repetitive ticket. They both hit the 21dma and had upside reversal. Unfortunately, I was not at home until around lunch, so I did not buy them as they bounce off the 21dma. Instead, I bought at basically yesterday’s close. This was clearly not the intent of Webby’s strategy, have to buy low. I justified it to myself by saying it is a sign of strong support. AVAV low was $202 at the 21dma. If I bought it 1% above that I would have got it around $204, but instead I had to pay $213. Maybe I should have just passed at that point.
Thoughts?
Hi Pete,
Avav I like how it had a nice reversal on the chart. But I do not like the fundamentals. The Sales growth estimates seems anemic and the earnings growth too.
Onon, I have held it but am out of it now. I like the fundamentals the look strong. That drop today they have recovered nice off of but this stock hasn’t been acting very strong.
But I like how it came back above the 21 day.
I would not have bought either of these stocks though. It feels like you are pushing it trying to find something to buy and it would have been better to pick something coming off a base. At least if you are going to use the IBD method.
Andy
Andy, you are not wrong, I admit it was pushing it by not getting in close to the 21dma. (FYI, I sold ALKT again, tried of it jerking my around).
For AVAV, I foresee revenues increasing from Ukraine way and changing US strategies, hopefully we see those soon. Note that I do have a base IBD position in from the base breakout around 187-ish. So this was a smaller add, which is part of IBD strategy. Note that my annotated sell plan on my chart was to sell if it failed support at the 21dma. Original breakout vol was not great, but that probably does not matter at this point.
ONON: To me the chart looks good
Strong growth rankings.
BKNG breakout out now, but on low volume.
DKNG jumping above 50dma on strong volume. Interesting day
Me too lol. That stock looked so good too. I noticed VITL eggs in my grocery store now.
Andy
Webby was on the daily video today and this is what he said 6/17/24
• Webby on Daily Video
○ He noted Friday that we really did not want to see a big up day because we were already a bit extended. But that is what we got.
○ This doesn’t mean you sell, but be en garde for rotation. In the 1990s we had a long run of “extended” markets. Don’t be afraid to trim some and invest in new breakouts or upside reversals. That’s away to stay invested while reducing risk and he would spread things out into smaller positions.
○ 10:40 - ONON big shakeout in the first 10 minutes of trading, then upside reversal. Webby will now set his stops at the bottom of that range. To feel safe, we need a few more days where the price remains above the 21dma. If we get that support, then we are looking for places to add. The places to add would be taking out today’s high and then more at yesterday’s high. He would expect to trade above today’s high tomorrow, if not that would be unusual and he might start selling to move funds elsewhere.
○ 13:06 - GE -Added to swing trader as is cleared moving averages and a downward trend line. Stop is yesterday’s low. Expectation is to breakout above the $169 resistance.
○ 16:33: CVNA upside reversal. Recent bases are tighter than older bases, which is what you want. Added to swing trader with stop at today’s low (basically 50dma). Expectations are that it goes above previous day’s high. But is is volatile, so keep your trade small.
○ 18:37 - BKNG - broke out today (weak vol). They already had some on swing trader and had no funds to add, but would have. Base was sloppy, so only a “B or C level chart” so treat it with caution. Handle of the cup base was a bit of a wedge up, so that is a negative.
Screw up review:
SIMO vs MU: I bought SIMO and Andy bought MU, MU is kicking my buutt even more now.
ALKT: I sold it yesterday, but apparently did not click the final sell button and I found I still had it at end of day. I should have sold immediately after hours. I should have put a market sell for the morning. I did not. I was away until after lunch and lost another 3%. Time to start using more stop loss orders.
ERJ: I have old holding with good profits. I had made some offense sales to take profits but kept a core position. Then I added going into this most recent base and afterwards. A couple days ago it round-tripped double digit gains, which is a sell rule with IBD. I did not sell immediately, but did sell those recent buys today, which was a couple % lower. Take decisive action sooner.
ELF: really wanted to buy this one on a breakout and had accumulated a good position in my “Saul” portfolio but had planned to take a breakout position in my IBD account. I was away from home and did not have a limit order in. Gotta start doing that.
ARM: another breakout I have been waiting for. I did make some early buys, so did add more at 4% into buy zone. But once again, not home and did not have a limit order in.
Lesson Learned for me:
Good news is that I am not heavily overweight in AI related stocks.
Maybe I will take a small and early position in GE as it heads to a pivot point.
Me to Pete, I didn’t have any money left and when I finally sold Meli it had jumped up. I was waiting for this but should have sold Meli yesterday.
Andy
GVA: stock of the day
Granite Construction, IBD Stock Of The Day: Infrastructure Play On Cusp Of Buy Point | Investor’s Business Daily (investors.com)
I missed my chance on this one when it blasted off the 50dma and through the buy zone, but now it has a small consolidation from that which is forming a base on base above the recent buy zone.
NVDA is hot and so are semis. Maybe too hot, I am contemplating trimming my IBD NVDA a bit, just to not be greedy. I did buy some ARM so that is really an AI play as well.
More stocks of note…
The IBD Market Pulse graphic recommends exposure at 80%-100%. Favoring the 80% side makes sense at this point, with Nasdaq breadth as weak as it is and the Nasdaq more than 8% above its 50-day moving average.
○ AI chip designer Arm (ARM) jumped 8.6% to an all-time high. Arm closed above a 164 entry after attempting that earlier in the week. A quick look at Arm’s weekly chart shows six up weeks in a row, and another one taking shape this week. At this point, it’s best to wait for pullback rather than chase the stock, which is already above a buy range that goes to 172.20.
○ ELF Beauty (ELF), another member of Leaderboard, soared past a 202.58 handle entry, helped by positive comments and a price-target hike from Canaccord Genuity.|
○ GVA setting up a new base on top of current buy zone. Has stellar fundamental rankings and RS of 94|
○ Super Micro stock advanced 3.7% to 920.01, now decisively above a downward-sloping trendline. The AI server maker and Nvidia partner popped 5.1% on Monday, bouncing from the 50-day line and briefly crossing the trendline. |
○ Video Review stocks: ELF, GS, GVA.
Some charts from my hot watch: AOSL, PLTR, SNPS, DECK, BKNG, DKNG, ASML, META, ROAD, COIN, SPOT.
I was shaken out of $Aspn today. Bought on 6/12/24 at $31.74 sold today at $27.99 lost 9.5% Ouch. I have a feeling this market is a little extended if you notice many stocks are up past the 21 EMA and the 21 EMA is extended from the 50 SMA.
Andy
RE: ASPN
Andy, Looks like you bought it right at the peak. I am sure your post-analysis confirms this was not a proper buy point: not breaking out of a base, not a bounce of 50dma (small add), etc. Yes, it had lots of ants, but IBD says these are an indicator of big institutional support and not to be used as a signal to buy. They are just likely to make the next proper breakout more successful. That last breakout was after a bunch of ants and the breakout bar shows an active trader could have bought fairly close to the pivot point.
IBD Views on Relative Strength (RS).
This Early Tell-Tale Sign Got Investors 38% Gain In Two Months On Netflix Stock| Investor’s Business Daily
One factor that historically sets apart winning stocks is price performance over the long term. In other words, successful stocks are already performing relatively well before they make their major price runs.
The IBD Relative Strength Rating measures how well a stock is performing compared to all the other stocks in the IBD database. The rating goes from 1 (the worst performance) to a maximum of 99.
It takes the stock’s price action over the past 12 months and assigns the number rating after comparing its performance against all other stocks. Recent performance is more important, so the rating gives more weight to the three most recent months of price action.
A perfect score of 99 shows a market leader that is performing at the top 1% of the whole market. The rating is updated every day, and in some cases can move abruptly.
