Education Center
When you give entry points (price/volume) for trades, which do you weigh more — price or volume? For example, [at 2:07] one of the plays was at the buy point ($8.85), but projected volume would only be approx. 216K shares (target volume is 270K). The projected is based on the volume as of 1pm EST of 108K. Do both have to fall in line, or above? Or, under what circumstances (up market, etc.) would you enter a trade where BOTH targets (specifically volume) are not satisfied?
A good question in the mechanics of when to enter. It so happens that we were watching the stock because it had made a good price move and volume as you noted was looking solid. The reason we had not entered before that time was the price action. The stock had hit higher mid-day but […]
My question is when a stock starts to pull back from the target point but almost at it within say 75 cents, when do you know that it time to take profit or to let it go for another leg up? Do you look at the volume and as long as its pulling put is below the average volume, or do you focus more on the MVA and if so what’s the best MVA to watch.
Targets are best estimates of how far a stock can run on a particular move. Thus a stock can get close to a target but not quite reach it. What we look at is how well it has worked on the price and volume action on the way up. A strong volume move up on […]
There are times a stock in the report hits a buy point but you do not enter (designated ‘buy not issued’ in the table). I like to set a buy point and then not worry about it, but that does not always work in this market. What is your process for entering?
We try to pick buy points that once hit with the right volume coming in the play has a good probability of performing as we want. In this market, though we set a specific buy point we want to stick with as it clears resistance (upside) or support (downside), it is not always an automatic […]
Regarding option strike date selection. You are looking at PRX for a possible play and the pivot was hit but the volume was not there so the buy was not issued. Why select the Aug 30 call which is trading at 8.50-9.00 instead of the May 35 call which is 3.70-4.00. I do not understand the reason to purchase the call with that much intrinsic value or that far out in time.
You are correct in focusing on the right option to purchase as the price you pay versus the delta and and the time to expiration directly impact your return. You need to get enough movement to cover the spread (the bid versus ask spread is larger on options to take into account some of the […]
Could you please tell me if you take into consideration price gaps in your technical analysis and if you are of the opinion that gaps always have to fill on a certain period of time.
There is an old adage that all gaps have to be filled. In many cases they are filled shortly after the gap is made, e.g., after a gap to the upside and the initial surge there can be a test back to fill the gap and test the breakout (and to the downside as well). […]
Could you explain to me the BxA size? I see 67×5, 1×1 and 4×3 and I can’t figure it out.
What you are looking at are how many shares there are at a certain bid price that are willing to be bought and how many shares there are to be sold at a certain ask price. In other words, there are orders put in by brokers on behalf of their clients. A client wants to […]
Would you suggest buying as many stocks as possible that I can or limiting it to a few that I can follow better. In other words, is it better to own 200 or 300 shares of 12 or 15 stocks or 1000 shares of 5 or 6 stocks?
Great question. Position control is a very important and overlooked factor in investing. You turn on most financial stations and the mutual fund managers will tell you that you have to diversify in mutual funds or if you do your own investing you need to be a ‘mini’ mutual fund, i.e., won lots of different […]
Is there any more to it than experience and common sense in trying to figure the day’s volume early in the day? When your “price buy” is hit I look for “volume buy”. Who the hell knows if the percent of completed market day volume will correlate to an equal percent of total days volume? It seems to me that the inability to judge volume from one minute to the next is why you have to do homework on the stock which you obviously do. I check the volume and price activity of the sector when I’ve been able to collect samplings of that particular sector which I have recently attempted to do. That seems to help a lot on the obviously sector oriented stocks like oil, financials, dot coms etc. Any suggestions?
There is no way of knowing for sure regarding actual day-end volume totals as volume surges in the first hour and then in the last hour. In many instances when a stock breaks out over resistance it is accompanied by a surge of volume that puts it well down the road to the target volume. […]
I am new at investing at stocks. I have an account with Ameritrade. I have AXL stock. Last week the stock was up to over $25.00 a share. I wanted to put a stop at $24.50, below the previous day low. Ameritrade would not let me place a stop at $24.50. Ameritrade said I had to place a stop below the bid price which was $19.00 a share. I don’t understand this. The stock was worth over $25.00 a share, but I can’t sell it at that price. I would have to sell it at $19.00 a share. I also don’t understand the asking price. The asking price was $98.00 a share. If I wanted to buy more stock, why can’t I buy it at $25.00 a share instead of $98.00 a share?
For those not familiar with AXL, here is some background. The stock broke over its 200 day MVA three weeks back and did rally to over $25. It has since pulled back, but it is holding the 10 day MVA right at 25. It was not trading for $19 or $98 per share. No doubt […]
You mention quite often in your reports that you watch the leaders and how they perform during rallies. How do you filter out the leaders to watch them? Is there a special screen that you use?
Looking for leaders depends upon what stage of a rally you are in, but the plan of action is still similar. During the downtrend we would keep an eye on stocks that were in ‘building patterns.’ That is our name for stocks that are coming off their downtrend and are working laterally, attempting to build […]
