Robsiv - Yes, knowing a few stocks well can be the best tonic in a confusing market. It's not like you have to look that hard to find good candidates either. Focus is more important to me than breadth of picks. Most people over-trade which is a serious problem. You can make a living off stocks you know quite easily by even just trading a couple stocks during the day. I have no problem with pre-earnings plays but I usually watch how well those are doing for awhile first to get the hang of the mood (i.e. anticipatory downswing or upswing or mixed, flat, etc.). Patterns are extremely important to perceive and a recognition that it can change rapidly or very widely by sector.
All told though - VRTS, CIEN, CHKP and JNPR have been spectacular traders on both the long and short side with great ranges of movement. Also, these are all stocks that have great followings and when they fall they are among the first to come back in a rally. They have real fundamentals and 3 of 4 have give good guidance. That makes them safer plays on the long side and slightly trickier shorts but look at today. They dropped back 4-8 points or more from highs.
Oh, and remember ARTG? What a great trader that was for a couple weeks. You could buy it on the 9:50 reversal and just hold it all day and make 2-7 points. What was great about it too, was that if the Market ran up, you had an extra minute or two to get your trade in and make sure the rally was real. Conversely if the Market started tanking hard, it gave you a little extra time to get out. These are the types of stocks that you want to find, imho. And if you watch too many, you will likely not perceive the important trading patterns or advantages of one over another.
You can't trade the same stock forever, so I really look hard at the fundamentals on the stocks that have just announced a positive guidance. Again, in earnings season, it makes sense to watch some of those as well. You also need to cull the news reports every morning but you there's simply no reason to abandon a stock unless it breaks its pattern. If you can buy JNPR or CIEN or VRTS in the low 50's and sell in the high 50's or 60's and then short them, why not keep milking it?
For most that are more active traders, I really believe it's the better strategy and far more sane. Find your favorite stocks in each sector and have them ready to go with buy and sell triggers. |
