Learning Techniques in Swing Trading

Greetings all to 2014!

Since September 2013, I’ve been implementing and tweaking techniques in swing trading versus position investing. Swing trading is not day trading but holding periods for swing traders can be anywhere from less than a day to several months. I found this style of trading to be more suitable and rewarding to me personally.

Everything I’ve learned prior to changing  styles of trading is still pertinent and very applicable to swing trading. The biggest difference between the two styles of investing/trading is that time frames to make decisions are more compressed with swing trading. Secondly, the swing trader must be willing to take on more risk and volatility. So understanding and determining risk/reward is critical to achieving success in addition to establishing well defined entries and exits ahead of entering a position.

I have been using Worden TC2000 (currently ver 12.4) to develop (1) watch lists designed for swing trading, (2) using alerts based on a variety of technical conditions more frequently and (3) developing my own scans to find stocks with the greatest potential to meet my goals. If I can explain my methodology in simple enough terms to help somebody, I will have achieved my ultimate goal in maintaining this blog. Shout out to all my friends and colleagues at StockTwits and Twitter who have liberally shared their insights with me to progress to this point.

MJ

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stubby’s holdings review $AE $CBOE $CELG $CME $FNGN $GMCR $HBI $LNKD $MDSO $MGA $MMLP $NKE $OCN $RKT $ROST $TRIP $VXX

commentary:

  • during yesterday’s (20130612) rout, i unloaded $COO $CBRL $IEP $V.
  • today i picked up some stocks that were on my radar this week and last week such as $HBI $OCN $RKT.
  • these that i picked up today $GMCR $LNKD $MDSO $ROST $TRIP were based on improving technical indicators.
  • stocks that popped up on my radar today that i don’t hold but find interesting are $CYH $LL $PRAA $RH.
  • i also like the following that were on my watch list for this passed monday $AMG $VRX $CAM $WDR $UHS $BEAV $COG $GILD $DNKN $BIIB $HEI $ASPS $WDC $TYL $LIFE $FLT $CSGP $BBSI.
  • i also trimmed back my $VXX position but still hold some.
  • top performers i help prior to today $AE +7.8%, $CME +2.57%, $MGA 2.15%, $CBOE +1.88%, $FNGN +1.83%, $CELG 1.82%, $NKE +0.57%, $MMLP +0.07%
  • newly added holdings finished $MDSO +3.8%, $RKT 3.71% $OCN +3.58%, $LNKD +2.93%, $ROST 2.85%, $GMCR 2.18%, $TRIP +2.09%, $HBI 1.91%

new holdings charts:

mdso_daily_20130613 rkt_daily_20130613 ocn_daily_20130613 lnkd_daily_20130613 rost_daily_20130613 gmcr_daily_20130613 trip_daily_20136013 hbi_daily_20130613 rkt_daily_20130613

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xUP signals on my radar $OCN $FOSL $ALGT $MGA $CTRX $IEP $CYH

10DMA xUP 20DMA: $OCN

ocn_daily_20130611

10WMA xUP 20WMA: $FOSL

fosl_weekly_20130611

10WMA xUP: $CTRX $IEP

ctrx_weekly_20130611

iep_weekly_20130611

weekly STOC xUP: $ALGT $MGA

algt_weekly_20130611

mga_weekly_20130611

weekly MACD xUP: $CYH

cyh_weekly_20130611

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stubbystock holdings as of EOD20130611 $AE $CBOE $CBRL $CELG $CME $COO $FNGN $IEP $MGA $MMLP $NKE $V

finviz daily charts.

these are the only holdings in my portfolio. just beware. i’m breaking my rules on with FNGN. float short is 15.86%. normally i stick to < 5%.

more details forthcoming.

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stubby’s watchlist for 20130610 $BEAV $CBRL $CME $COO $CYH $FNGN $OAS $OTEX

stubbybrown:

UPDATE: i included 2 tabular representations of the watchlist included herein. technical buy signal indicators are color coded for additional qualitative review.

Originally posted on Stubby Brown's WS Finance:

on friday, june 7, 2013, names on the list below popped up on at least 1 technical scan alert i maintain in my worden TC2000 TA application (or more in some cases). in another update i’ll tabulate these names according to technical signal scans, IBD ranking and any other noteworthy filter criteria. most are familiar stubby mentions including a few first-timers. the names listed in the title made new 52wk highs.

REMEMBER: stubby does NOT chase names based on popularity or speculation but looks for potential buy opportunities based on sound technical & fundamental setups. stubby also likes diversification for balance. stubby is very active in the market but I DO NOT day trade.

list: AE AMG ASPS BBSI BEAV BIIB BWLD CAB CAM CBRL CME COG COO CREE CSGP CYH DNKN DPZ FCFS FLT FNGN FSLR GILD GPOR HEI JOBS LAD LIFE LL MFRM NKE OAS OTEX PDCE…

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stubby’s watchlist for 20130610 $BEAV $CBRL $CME $COO $CYH $FNGN $OAS $OTEX

on friday, june 7, 2013, names on the list below popped up on at least 1 technical scan alert i maintain in my worden TC2000 TA application (or more in some cases). in another update i’ll tabulate these names according to technical signal scans, IBD ranking and any other noteworthy filter criteria. most are familiar stubby mentions including a few first-timers. the names listed in the title made new 52wk highs.

REMEMBER: stubby does NOT chase names based on popularity or speculation but looks for potential buy opportunities based on sound technical & fundamental setups. stubby also likes diversification for balance. stubby is very active in the market but I DO NOT day trade.

list: AE AMG ASPS BBSI BEAV BIIB BWLD CAB CAM CBRL CME COG COO CREE CSGP CYH DNKN DPZ FCFS FLT FNGN FSLR GILD GPOR HEI JOBS LAD LIFE LL MFRM NKE OAS OTEX PDCE PRLB PRXL REGN RKT SODA TSLA TYL UHS VMED VPRT VRX WDC WDR

finviz charts

20130607_tech_alerts.xlsx_p1

20130607_tech_alerts.xlsx_p2

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out of the market

the market needs to correct and re-assemble a new global growth thesis. from a technical stand point, the market had gotten extremely overbought over the last couple of weeks. let’s see what the next several weeks bring.

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ugly market conditions $SPX $DJIA $COMPQ $STUDY

today i unloaded a number positions as it’s possible the market is heading toward a correction (down 10% or more from recent high is technically what a correction amounts to). if i had done nothing, the portfolio only dropped by 0.78% while

  • $SPX dropped 1.43%
  • $DJIA dropped by 1.36%
  • $COMPQ dropped by 1.01%
  • MORNINGSTAR LARGE VALUE $MLVL dropped 1.57%
  • MORNINGSTAR LARGE CORE $MLCR dropped by 1.52%
  • MORNINGSTAR LARGE GROWTH $MLGR down by 1.27%
  • MORNINGSTAR MID VALUE $MMVL down by 1.19%
  • MORNINGSTAR MID CORE $MMCR down by 1.22%
  • MORNINGSTAR MID GROWTH $MMGR down by 1.22%
  • MORNINGSTAR SMALL VALUE $MSVL down by 0.72%
  • MORNINGSTAR SMALL CORE $MSCR down by 0.8%
  • MORNINGSTAR SMALL GROWTH $MSGR down by 1.09%
  • see market barometer @ http://www.morningstar.com/

20130531_market_barameter

this weekend i’ll provide a little detailed analysis and update my portfolio holdings.

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stubbystock portfolio review [EOD20130530] $MDSO $CPA $FLT $GILD $CREE top list by IBD rank

symbols in alphabetical order: BBSI, BOFI, COG, COST, CPA, CREE, CSGP, DPZ, FLT, GILD, MDSO, MPC, SHOS, TYL ,UHS, UNF, VAL, WAB, WDC, WDR

finviz charts: in alphabetical order

stubbyrank criteria using IBD SmartSelect data:

  1. IBD composite rating: 80 or up
  2. IBD rs rating: 80 or up
  3. IBD eps rating: 70 or up
  4. equities are sorted in excel by 1, 2, 3 from above in that order. shifts ranking toward momentum rather than fundamental selection.
  5. typically i like to hold stocks with <5% float short. BOFI CREE DPZ are <10%.

stubbyallocation rules for constructing a diversified portfolio: (brief summary)

  1. i pick a benchmark that fits my thesis for at least a quarter going forward. then i use stubbyselect screens to look for additions to balance the portfolio as close as reasonably possible to the benchmark. currently, i am allocated to small/mid cap growth. the allocation is a close mix between ishares russell 2000 growth index etf IWO & ishares midcap growth index etf IWP.
  2. in addition to stubbyselect screening, i target long setups whose prices are reasonably close to each other and buy positions of shares in fractions based on a target total capital outlay. if i target $20K – $24K, positions may start in 1/4 or 1/8 positions. when i buy a long position, the cost of buying and selling the position ought not be more than 1/4 to 1/2% of that positions cost. i can achieve this using Interactive Brokers as my stock broker.
  3. to start with i equally share weight all purchases. years of backtesting have demonstrated my portfolios generally outperforms the benchmark by a handy margin over the course of several ups & downs over a year period of time. as the market moves, i’ll add or subtract positions based on technical buy or sell indicators. sometimes this results in being out of balance with my benchmark for some short periods of time.
  4. positions will be sold when they approach 1-3% loss when market technicals are very shaky. during strong uptrend markets i might let losses approach 5-8% if the stock is a leader and i feel there’s a good change of technicals turning in favor of the stock. positions with gains in the 15-30% range will be reduced or sold entirely.
  5. i take great advantage of worden tc2000 (the same people who produce freestockcharts.com) as my TA app and i set alarms based on price, volume and a whole host of technical indicators like cross ups or cross down in MACD, RSI, STOCHASTICS, CCI etc. worden does not integrate with my broker but i can manually setup automatic stop/loss trades based on my TA in tc2000 if i wish. i’m not a day trader which allows me more flexibility. for example, every now and then you may hear about mini or micro stock market crashes. prices suddenly drop 10% or more and then recover in 5 – 10 mins. an automatic stop/loss could lose a trader lots of money. this is a good segway to my next rule.
  6. i always keep large amounts of cash handy. i occasionally buy bond etfs and only under certain circumstances will i purchase inverse, levered inverse etfs or volatility tracking etfs. however i have lots of experience with inverse levered etfs and understand their weaknesses and advantages. prior to the 2008-2009 market collapse i developed a delta neutral arbitrage algorithm based on long/short etfs for a particular index which resulted in producing an oscillator to measure bullish or bearish market trends. i found the algo to be no more reliable than conventional oscillators as market conditions substantially improved. i do not trade options.
  7. i will bend these rules only when i think there is a high probability of obtaining exceptional short-term gains or to maneuver away from outsized losses.

in another post i’ll talk about my info gathering routines to look for catalysts for stock i hold or am watching, news to stay on top of market sentiment and i follow the domestic & global bond market like a hawk, currency indexes, precious metals futures and commodities sometimes. these can be proxy indicators for future supply and demand effecting the economy and the consumer in particular. another topic i will is how i use analytics in the morningstar.com personal portfolio manager and sites i rely on during earnings season.

current asset allocation: provided by morningstar.com personal portfolio manager.

stubbystocks_20130530b

worden charts of top 5:

mdso_daily_20130530

cpa_daily_20130530

flt_daily_20130530

gild_daily_20130530

cree_daily_20130530

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9 stubbyselect mentions [EOD20130529] $CVI $BIIB $FLT $GILD $VRX and more

symbols in alphabetical order: ACT, BIIB, COG, CVI, FLT, GILD, LIFE, VRX, WDC

disclosure: stubby is long FLT, GILD, WDC

finviz charts: in alphabetical order

stubbyselect criteria:

  1. population of equities scanned: IBD50, IBD BigCap 20, IBD NewAmerica, IBD 8585, IBD MainTable, ST50, BarChart Top100. date of lists as of 2013-05-27
  2. stock price > 50 daily
  3. percent shares held by institutions ranks between 75.00 and max (worden tc2000 specific)
  4. latest short interest ratio ranks between min and 75.00 (worden tc2000 specific)
  5. YTD % change > 40
  6. price history above 20DMA
  7. price history above 50DMA
  8. short float <5% (filtered @ finviz)
  9. IBD composite rating: 80 or up
  10. IBD rs rating: 80 or up
  11. IBD eps rating: 70 or up (results sorted in that order to obtain rank)
  12. NOTE: today’s stubbyselect screen was NOT the same as yesterday’s. today;s list of stocks is not focused around any particular technical signal or indicator. so today’s list is very general. in the future i will start categorizing stubbyselect criteria in more defined classifications.

stybbyselect_orig_scan_criteria_20130529

stybbyselect_orig_scan_results_20130529

results & ranking:

worden charts of top 5:

cvi_daily_20130529

biib_daily_20130529

flt_daily_20130529

gild_daily_20130529

vrx_daily_20130529

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18 stubbyselect 10DMA xUPs [EOD20130528] $VRTS $AMG $FLT $PKG $BEAV and more

symbols in alphabetical order: AE AMG AMP BEAV BLK CI DIS DISCK EVR FBHS FLT GEL LVS MANH PKG UHS VRTS WAB

disclosure: stubby is long UHS, WAB

charts: in alphabetical order @ finviz. NOTE: DISCK is not listed at finviz.

stubbyselect criteria:

  1. price crossing up 10DMA
  2. short float <5%
  3. IBD composite rating: 80 or up
  4. IBD rs rating: 80 or up
  5. IBD eps rating: 70 or up

vrts_daily_20130528

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the last remaining stubbystocks [EOD20130522] $ACT $DPZ $GILD $ICON $PAA $SAIA $TBT $TYL $UHS $UNF $VAL $WAB

charts & quotes: 

No.1 rank chart and commentary:

paa_daily_20130522_tc2000

  • highest ranked: PAA
  • today i unloaded a lot of holdings, some for profit and some for loss. DPZ, ICON may wind up going because their float short percentages are higher than i like respectively: 6.19%, 23.25%.
  • ACT: hourly chart – exhibiting standing bear with claws up high. my way of saying bear flag. conceivably could drop to 120.
  • DPZ: daily chart – looking decent. could make a run for it’s 50DMA now @ 52.98.
  • GILD: daily chart – looking decent. could make a run for it’s 50DMA now @ 50.53.
  • ICON: daily chart - exhibiting standing bear with claws up high. could make a run for it’s 50DMA now @ 26.82.
  • PAA: daily chart – behaving pretty well. fairly tight MACD range. could make a run for it’s 200HRMA now @ 57.56.
  • SAIA: daily chart – a little bear claw looking. conceivably could drop to 40.
  • TYL: daily chart - a little bear claw looking. conceivably could drop to 63.
  • UHS: daily chart – near decent looking support level between current price and 65.
  • UNF: daily chart - near decent looking support level between current price and 94.10.
  • VAL: daily chart - a little bear claw looking. conceivably could drop to 68.
  • WAB: daily chart – actually looks in a bull flag formation. solid support starts kicking in @ 107.5.

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2 notable 52wk HIGHS [EOD20130522] $BIIB $JPM

charts & quotes 

ranked table of highs

No.1 rank chart and commentary

  • based on my screening criteria, neither of these 2 stocks would have made the notables were it a normal day on wall street.  BIIB & JPM did not close above the previous 52wk (or all time high if that is the case.) not much was normal on wall street today. more on that in another post.
  • having said that, these 2 stocks did hold up rather well considering the extreme selling pressure on the market as a whole. a look at BIIB’s chart and what jumps out MA divergence is around 52 wk highs. this leaves BIIB somewhat vulnerable to additional selling pressure if investors and traders decide in the next few days it’s time to take profits. we’ll just have to wait and see.
  • so i have no plans to get into BIIB at the moment. it might be wise to consider taking some profits before the street forces the trade. my status on BIIB would be SELL some if profits are high and hold otherwise. i’d like to see MACD come in and revert to mean some.

biib_daily_20130522_tc2000jpm_daily_20130522_finviz

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11 new stubbystock HIGHS [EOD20130521] $CVI $MIDD $JPM $PNC $SAIA $GS $AXP $ASML $TM $C $UNF

charts & quotes

ranked table of highs

  • stubby’s rank criteria based on IBD SmartSelect parameters.

No.1 rank chart and commentary

  • Company Profile: Middleby Corp (MIDD) Company Description: MANUFACTURES A BROAD LINE OF COOKING AND WARMING EQUIPMENT USED IN HOTELS, RESTAURANTS AND OTHER INSTITUTIONS.
  • MIDD has been one of my fav industrial stocks this year. currently listed as no. 1 leader in it’s category on IBD. the daily & weekly chart show MIDD has recently broken out. in the weekly timeframe, this is the second week of gaining higher since since breaking out of the box. MIDD looks to continue it’s charge higher.
  • my current status for MIDD is HOLD until the stock exhibits to test the upper trend-line drawn in the finviz daily chart OR another MACD xUP on the daily chart.

midd_wkly_20130521_tc2000midd_daily_20130521_finviz

other setups to watch in todays 52wk highs list

  • as mentioned yesterday, CVI – breaking out through a resistance level of 65. if it pulls back, watch for support @ 66.13 in which case would make a good entry if bounces higher on high vol.
  • JMP – status HOLD. new hrly support level(s) @ 52.00 & 51.01.
  • PNC – status HOLD. new hrly support level(s) @ 71.16 & 70.35.
  • SAIA – status HOLD. new hrly support level(s) @47.36 & 46.95.
  • GS – status HOLD. new hrly support level(s) @ 157.44
  • AXP – status HOLD. new hrly support level(s) @ 74.20 & 73.00
  • ASML – status HOLD. new hrly support level(s) @ 77.52
  • TM – status HOLD. new hrly support level(s) @ 127.60 & 122.53
  • C – status HOLD. new hrly support level(s) @ 51.00 & 49.05
  • UNF – status HOLD. new hrly support level(s) @ 95.50 & 94.51

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2 notable 52wk HIGHS [EOD20130521] $AHGP $JPM

charts & quotes 

ranked table of highs

 

No.1 rank chart and commentary

  • this is the first time AHGP has come across my screen. i have no position but will be watching closely. there’s good support @ 60. if it comes in, i may snap up an entry pos.
    ahgp_daily_20130521_finvizo
  • JPM weekly MACD xUP this week. good entry point.
    jpm_wkly_20130521_tc2000

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