For Newbies Mostly: New format Market Gems "under construction" Many questions overnight once again on <alerts> etc.
There is a difference when we post a few stocks BEFORE the market opens as possible movers for the day than the actual <<ALERT>> after the market opens. In the first situation there is an uptrend already (or a pullback on a very strong stock tha that might be ending).
It was 3 or 4 stocks that were mentioned in code yesterday in early morning, meant exactly that those nasdaq from the group have excellent chart patterns, (as you can readily see) which makes them technically poised for a breakout (one had just reached a new 52 week high that day and still was up over a point the next day) and another was in the midst of a small pullback and SSTI was in a 'squat' position meaning it could go any way, either pull back or move forward through resistance.
Refresher on Earnings Plays
These three stocks (ones mentioned on thread yesterday before market opened) are doing this well because they have a product/service that is in demand (niche market) and their are in the phase of growth that we like to call 3 digits (growth of more than 100% a year).. We dont mean the stock earnings $0.30 and then $0.60 that is too much to expect. Its more like $0.03 and then $0.06 but you can see with just the AMZN's and AOL's how important that is.
It also means that their growth going forward is estimated to be at least 25% a year for the next 3 years and that is modest because the ones in the newsletter/calendar, the growth is more like 50% a year for the next 3 years. That is how stocks like QCOM, ADIC, EMLX, HLIT got their start. EMLX is now a very expensive stock but it will probably stay that way because its growth is also STILL in the triple digits. Unfortunately HLIT has an P/E of of about 300 which is rather absurd but that matter hasn't phased the shareholders or traders. The ones I choose have bigger than average P/E's as well but that's what spurs them along: expectations are strong for their growth so their multiples are high.
When we have a stock like HELX, we get a little more excited because the opportunites are there for HELX to one day be 70 or 80 a share or at the very least for about big pop on anticipation of their earnings report. UNFY, PUMA, FRNT, CAMP, FWRD were all small stocks (of course some of the P/E's there were much smaller), that ended up as holds from quarter to quarter.
That may or may not be the case with HELX, but you have a good chance if you are aware of:
1) date earnings come out
2) the eps growth of the stock estimated going forward
3) any incidentals like: MSFT, LU or so other company might be making contracts for their parts/services or whatever
4) the technical position of the stock. Is the chart looking good? How far is the stock from its 52 week high? Is it in a weak uptrend?
weak uptrendds are preferrable because the stocks are then not overbought as you can readily see in any oscillator reading like the Stochastics.
5) Is it in a strong uptrend (closer here to the 52 week high, but possibly also to an overbought position, nevertheless as you have seen with MSTR, IBIS, SEBL, QLGC, AMCC they
can just run and run further)
The posts including for those stocks were just because they were new, I had just filtered them out on Wednesday night from over 500 hundred stocks reporting those days and they were not on the October calendar so I wanted to bring attention to them rather than have them just appear as one of the earnings plays.
If you look in the FAQ's
Market Gems Coding System; Simple on Silicon Investor
Our coding system for newbies: The numbers we use are on the calendar.. NOT on the newsletter itself the calendar isaccessible through the "CALENDAR" navigational button or the newsletter navigational button on the homepage.
The earnings calendar is always refreshed on the Thursday morning BEFORE the week of earnings which begins of course on every new Monday through Friday. That means that the stocks reporting May 3 through 7, for example, will already be listed on the calendar by April 5 and the corresponding newsletter with the analysis will be out by April 15. Fully one month before earnings we will begin to post our calendar, but because of the large interval to the report we expect dates to change or even not to be available at all (there is always some kind of date if only tentative)..
Posting the calendar 2 weeks to 4 weeks , before will enable early entry in some of the stocks for pops more than once. The internets, the semiconductors, the telecommunications, software stocks in our newsletters all gave early entry buy signals.
All the stocks are numbered and in columns next to the date they report. Print out the "printer friendly" calendar on thbottom of the calendar (just click the URL) so you can have the list beside you. In the 'heavy' earnings season we might have about 28-30 stocks for the week. The ones that do nothing we simple ignore. We call only the ones that trigger technical buy signals. By the time they are called you will have the newsletter (out by Sunday afternoon) which gives you in depth fundamental and technical analysis of the company so you are not flying blind.
We don't believe in just calling stocks without any preparation beforehand.
The actual codes:
Earnings Plays (EP): #4 May 4 EP, or #4 5/4 EP would mean the fourth stock on the list from May 4..for instance the stock Quanta Services was #2 5/7 EP, which stands for Stock Number 2 on the earnings play calendar for May 7th, or MAST which was #2 EP 5/6, or #2 EP May 6
Watch List (WL) : This is the WL code... today's watch list: for instance when we called "RAD" it was #8 WL 5/4 or #8 WL May 4. We rarely go back into an older watch list using codes by that time we use the stock name and symbol so you don't have to delve too deeply into your database.So there is a difference when we say it should be watched before the market opens, obviously we don't know if the stock will continue to be in its present uptrend or move south.
The stocks that have the <ALERT> on the thread usually took out the previous day's highs, or hit a technical buy signal like: bouncing off the 20, or 30 period moving average on better than average volume, broke significant resistance, or even just bounced off support. Some signals will be stronger than others. Some will come from 15 minute charts and will pertain to our very volatile IPO's and/or tech stocks with intraday trading ranges from 1-20 points. Other signals will be from both the daily chart, 45 minute chart and would be better for stocks to be held longer (ADRX, DISH, VERT, BVSN, etc)..
Questions about calling buy triggers
When we have our chat room we will be able to elaborate in detail on the nature of the buy trigger in every case and we even manage to do that up to a point on Silicon Investor. SI is a great forum but its getting more difficult for our newer members to sift our buy signals from the amount of other posts
There is no problem there since the situation is temporary and I'd rather say that then get into any more lengthy explanation as to how we can "ask questions during the market day about any particular stock" etc. The more people come to the thread the more posts there will be and that has its good points and of course, some not so good points. That is why sites like Tokyo Jo and Anthony Pacific have gone (well maybe not exactly the whole reason why) private as well as public.
The intraday updates for the prices we charge are the best we can do under the circumstances. They were meant as an aide in the beginning but it caught on, so much so that a very many subscribers count on the updates even more than they should and should be using them more as a stepping board for their own trading systems. So please be patient it will take another few weeks and you will have your 'trading forums'.
Buy triggers will be simple and understandable. Stock sells will be mentioned if the stock really loses momentum otherwise we might say "we are holding overnight for a possile swing trade". depending on how the chart looks at tend of the trading session. We don't want to hold a stock that has lost 75% of its intraday gains and the chart is signalling loss of volume and momentum. If you look at 5 day charts of some of the stocks we call that is the average amount of time we usually hold a stock. Take a look at the 5-10 charts of ADIC, BVSN, COST, PHCM, etc. You will see the continuation of the uptrend in most cases.
In some cases, like PHCM, you will sudden a sudden drop or advance. That is the risk of a stock that gives 10 points or more in a session. that is also why we look at the profit we make first, then the amount of days you are holding the stock. I'd rather make 4 or 5 points out of a $30 or $40 stock that was a daytrade than hold a stock that goes up 1/4 point a day and takes 10-20 days for the gain. There is no guarantee that a stock like Whirlpool will continue up even after good news just because it seems 'safe'.. It is actually not more risky to hold a stock like VERT or VIGN which were and still are in strong uptrends.
Of course for the lengthy hold, you'd probably be better of with WHR, for obvious reasons. Although I'm no protagonist of the buy and hold theory it probably makes more sense holding 52 week position in CSCO than it is HLIT, SNDK or VERT. But as we are short-term traders we look to the 2-5 day span for the watch list plays and even the earnings plays. The major difference is that after the earnings play reports, it usually becomes possible within days to get into a longer term position and in every new rally, this stock will move stronger and higher than the 'fundamentally unsound' stock that has not met estimates or just is not earning any money at all.
jenna |
