(This post was last modified: 2014-04-15, 08:59 PM by ksarkar77.)
RE: US Stocks - Watchlist and Discussion (Premium)
(2014-04-15, 12:39 AM)isatrader Wrote: A few for the US watchlist on the long side - BEBE, ZN
And on the short side - MTSN, EGLE, ADUS, ENH, MSB
Isa Trader,
BEBE: When looking at the Industry $DJUSRA (DJ US Retailer, Apparel), the whole industry is in Stage 3. Do you think it will be prudent to consider this as long?
ZN: Industry $DJUSOS(D) (DJ US Exploration & Production) is showing excellent strenth. But I am not able to identify the Stage 1 on the chart of ZN. Where do you think it is?
Thank you for the excellent site. I hope to contribute here.
RE: US Stocks - Watchlist and Discussion (Premium)
(2014-04-15, 08:58 PM)ksarkar77 Wrote: BEBE: When looking at the Industry $DJUSRA (DJ US Retailer, Apparel), the whole industry is in Stage 3. Do you think it will be prudent to consider this as long?
Welcome to the site ksarkar77,
It's showing a potential Stage 2 continuation pattern, but is in a weak group as you say, so hence you likely wouldn't want to go long at this time, but is one to keep an eye on if the group recovers, as the relative performance it's showing could make it a potential leader in that group in the future.
(2014-04-15, 08:58 PM)ksarkar77 Wrote: ZN: Industry $DJUSOS(D) (DJ US Exploration & Production) is showing excellent strenth. But I am not able to identify the Stage 1 on the chart of ZN. Where do you think it is?
Stage 1 in ZN began to form in May 2013 imo, and after an initial rapid move formed it's first swing high which would have defined the top of the initial Stage 1 range. It then had a sharp pullback for many months and formed a higher low, and then a new lower high closer to the 30 week MA in December 2013, which would then be used instead as the top of the Stage 1 range. So it's finally cleared that this week on strong relative volume, with the relative performance above the zero line and the 30 week MA turning up, and so would be considered in early Stage 2A imo. However, it has strong resistance still to clear from multiple attempts over the last few years at the $3 zone, and so still has some work to do yet to prove itself. Although, this is against the backdrop of a market in Stage 3, and so you should be very cautious about trading long, as it's not advised by the method at this point in the market cycle except for the odd hedge in exceptional cases.
The purpose of the watchlist picks that I show, is to highlight the best patterns I see in regards to the method as possible on both the long and short side no matter what stage the market is in, as for example stocks that pop up on the long scans when the market is in Stage 3 or 4, could be potential leaders of the next major bull move when the market begins to recover into Stage 1 again in the future. So we can make note of them and keep an eye on their charts.
I hope that makes sense.
isatrader
Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
(This post was last modified: 2014-04-15, 10:13 PM by ksarkar77.)
RE: US Stocks - Watchlist and Discussion (Premium)
Thank you very much. I am still reading the book. But seeing practical examples in this site helps a lot in the learning.
Question regarding market being in Stage 3. Assuming that you were referring to the US market, I was looking at the chart of SPY. It appeared to me that market is in late of Stage 2. Could you please explain why do you think that market is in Stage 3?
