Education Center
A recent comment you made really got my attention. You said, “We see lots of stocks starting to form up patterns that were not doing much until recently. Would you mind sharing with us what some of these stocks are and what improvement you see in their patterns?
We are seeing some of the stocks that are still coming across with decent sales and revenues (though down in the economic slump), leading the pack. And some of these former leaders are showing signs of life. Some are still deep in the bases, others are moving higher. What are these stocks? BRCD, SEBL, CTXS, […]
Could you please explain the significance of a pattern showing a doji on very high volume as opposed to the same doji pattern, but with light volume? How should the two differences in volume be interpreted on the same doji pattern?
A doji is a one-day pattern on a candlestick chart. It occurs when the open and closing price are the same or very close to one another. What it signifies is that the buyers and sellers were evenly matched: the stock ended where it started, so no one won the day. These symbols are the […]
[Last night in the report we commented about when we would look at buying semiconductors in general, i.e., when their charts improved. This question followed today.] What would the charts show to reveal a true buy signal? Aren’t most chip stocks slightly above the April lows? What do you look for? Are you expecting more downside?
We would look for signs of more accumulation and not the back and forth, volatile action we are seeing. The stocks are totally news driven right now, and they are bought and sold day to day on high volume depending upon whether the news is favorable or not. We would look for more classic bases […]
I’ve taken a position in LEN as you’ve recommended in the past. Today Yahoo Finance ran a story with the headline “Homebuilder Lennar files shelf for $700 million.” What does that mean, and how might it affect my investment?
A shelf offering is basically where the company plans to sell more shares of stock in the future. In other words, there will be more float out there and it can dilute the value of current shares in that it will take more buyers to move the price higher. Now that report came out after […]
You mentioned ‘delta’ the other day re buying a call. What’s a delta?
Delta is related to options. It is a measure of how much an option’s price will move based on how much the underlying stock moves. For instance, if an option’s delta is 50, if the stock moves up $1, the option will move up 50 cents ($1 x 0.50). Thus, we prefer higher deltas as […]
If I buy the June call option on SCMR at 12.50 what will happen? If the stock reaches $12.50 or more before expiration, can I sell it? Or, do I have to wait for it to expire? How would this work?
You have several basic questions about options. There are many factors you have to understand about options before you can successfully add them to your investment arsenal. If you do not understand how the work and how to apply them, you can get hurt much as you can get hurt if you do not know […]
If a stock has met the buy point but has not yet hit the precise daily volume you want, should a buyer wait until the stock has met or exceeded that volume – perhaps waiting to purchase the stock on the day after the recommended daily volume has been met? Or do you suggest simply keeping tabs on the volume throughout the day as a percentage of the daily volume it is likely to achieve? Generally, is it ever wise to buy a stock when the buy point has been met but the volume has not yet entirely filled out?
Volume levels can be hard to gauge. Volume is heaviest in the first hour and last hour as institutions make their bets for the day and position themselves for the next session. Many times we will see volume shoot up on a breakout early in the session, and that is a clear signal to enter. […]
I’ve been trading for almost 10 years, and I had never heard of an 18 day moving average until I subscribed to your service. Is it a “trader’s secret” or something? It just seems kind of odd when compared to the 10, 50, and 200. Do you have any information about it?
We developed our system of looking at stock movements after reading and trying everything we could get our hands on and then holding onto what worked. We found that the 18 day exponential moving average is often a much more accurate indicator of shorter term support for stocks moving out of solid patterns than other […]
What do you think the dangers are of a European economic slow down prolonging the US recovery of earnings for another year?
As we said last week, Europe feeds off of the U.S., not vice versa. We make our own wake over here and had to do it all during the 1990’s. It won’t help, but we were not expecting any help from Europe. Indeed, as we said over a year ago, as the U.S. goes, so […]
Could you please tell me what ” team trades ” mean? Are you all trading at the same time? Do you send members emails to trade those?
Team Trades are trades we make on the plays that we have written about in the reports. The purpose is to show subscribers how we go about acting upon the plays that we have set up, i.e., what we look for, when we get in, what positions we take and at what points. It helps […]
