Eric: Before I get to my (possibly "newby") question, I want to add my two cents worth to thank you for starting this thread... Having visited many threads, I want to complement you and the other knowledgable posters on your insights into the markets. I have learned more on this thread that from all the books by the (so-called) "experts".
I am trying to develop a short term momentum style of investing, that so far has been successful, IF I can find the right stock. I (like everyone else, I guess) am looking for stocks that have been channeling for a while on low volume, then jump up (or down) on a volume rise, then ride it for 1 - 3 points.
My problem - HOW to find these stocks BEFORE the run is completed... Allow me to give an example from Friday; On Sale, Inc (ONSL) It was trending at + or - 18 for the last 9 or 10 days, then at about mid day, it jumps on high volume up to 24-25. That would have been a very easy trade, IF it could have been signaled at the first part of the move. Briefing.com reported at 12:13 that rumors of AMZN was making a bid for the co., but that was AFTER the runup.
I use QCharts, and it has lists that show "very short term up" lists, as well as volume rate lists, that update each minute, but it is easy to miss if you don't click on the lists 10 times/min; that's tough to do if you are trying to work a little in between...
I know you can set up alerts that will tell of a breakout, and you can set up buy stops if price breaks over a certain level, but the problem still exists of finding WHICH stock to set them on.
Maybe you or some of the other more experienced guys can expand a little on how you identify what stocks to closely watch; is it better to only watch a certain # of stocks, only highly volatile (e.g. internet) stocks, the top # volume stocks, "pet" stocks that you trade all the time, etc. Or is there software the you can program to scan for trending stocks that break out on volume, that would do the work for you.
Maybe I am looking for a "pandora's box" that doesn't exist; maybe the answer is to look at hundreds of charts a day, over and over, until you hit on one that is moving.
In any case, I know it would help me, and possibly others, to discuss the methods you guys use to identify your database of stocks you are watching, and how you get a signal that a particular stock is moving BEFORE it moves all the way.
Thanks in advance for any help!!
BP |
