jon, ACRI was one of my wife's most profitable trades from last week and I think it is a good teaching stock for us all..
When does a stock have a good chance of continuing momentum from a day one breakout?
1)As we look at ACRI we observe a classic Head and Shoulder bottom, pattern reading is 4 by 9..Neckline is at 9.00..Add 5 to neckline for potential target of 14.00..Stock only made 13.37, so did not reach target area..Wife was out just below
12 on Thursday..She did not stay for run at 13.37..
2)When I discovered this stock initially, I looked for news..There was none on initial break day..Stocks have better chance for continuing momentum when there is no news...Most traders sell into any news, and this of course will put the brakes on any moving stock..
3)Note how the ADX of this stock was in the early 20's..As everyone knows my favorite stocks to catch have ADX from 17 to 21 and are moving up..
4)Applying a Cooper principle, the high low price range on breakout day should be the highest in the past 8 trading days and stock should be breaking to a new 60 day high...
5)Stock was making a new 52 week high
6)Stock gapped on day two, then sold off, when stock recovered and reapproached the gap price it gave the buy signal of continuing momentum at 10.56...
As traders, you have to make sure the averages are in your favor...This stock presented a low risk opportunity for profits..Lesson to be learned, after your nightly scans,rip apart your watch list, only keep the very best on that list, share it with no one...
My wife's watch list for Monday has six stocks long, and 4 stocks to watch short...My wife will select one or two to trade...
Regards, Mark
P.S. should pull back now to 10.56-10.87 area.. |
