Monthly Archives: July 2014

Almost-Breaking Pattern

When you go to any major financial web site and you look at news, you’ll see lists of stocks that just broke new ground and are in an all time High or a new yearly high level.

That is fine for the news but it might be too late to have a decent profit at a minimal risk which is what you are looking for.

The pattern you need is called “Almost Breaking” and is a pattern of how the chart of the stock looks just before the break out of resistance.

This is a not so famous pattern and not many web sites publish it regularly.

Some might argue that the pattern is not a sure thing and the stock might bounce back from the resistance level. That is true and you should be aware of the resistance and its meaning.

A real example from today, July 31, 2014 is NVO or as social networks like to tag it: $NVO. It is ranked high in the monthly Modified Magic Formula, near the top 20% and is near the yearly high of $48 which it reached at the end of February. Later it bounced several times between $42 and $46 and might soon break above the $46 level. You can make a profit from this situation and it might even go above $48 although there’s a smaller chance of that happening soon.

NVO_JULY31_2014

Forecasting stock moves is similar to forecasting the weather. This is not the same as predicting the future. Predictions and Forecasts are not the same. Forecasts have intrinsic uncertainty and when the weatherman says tomorrow will be sunny with a chance of showers you get ready for both and know it will be a rare outcome if it pours but you’ll be ready and adjust.

Forecasting the weather in Israel (where I live) in the summer is easy. It never rains and it’s always hot and sunny. This is the situation you want!

Forecasting the stock market is difficult most of the time but easier in some occasions. You want to risk your hard earned money on the rare situations that it’s easier to forecast and you have an asymmetrical outcome. Like tossing a coin and winning $200 if it comes out heads or losing $10 of it comes out tails.

This is the exact situation when the stock has a history of trying to move up and bounced a few times at the same price level. If it tries enough times, it will succeed sooner or later.

What you want is to enter an option combination (not binary options) namely a cheap call spread with a high probability of winning and a low cost.

You can also use a bear put spread in the mirror image of the pattern where a stock moved down in the past and has a support level stopping it from going lower and it nears that level again.

The strategy works because the call spread (or put spread) is especially cheap before the stock crosses the resistance level and will be hugely rewarding if and when it succeeds.

This is known as “Buy the rumour and sell the news” way of thinking, only now it is attached to a specific strategy that works that implements it in a concrete way.

This web site publishes daily stocks that pass the combined filter of a modified “Magic Formula Investing” and is near a yearly resistance or support level.

Want daily alerts? Give me your email, muhahaha ;)

Ami Heines

Ready to break up – $ETJ

Today, I have just one stock ready to break up from a long term resistance of a long term resistance at around $11.70 which was the highest point at the beginning of 2014.

We can see a nice cup and handle formation which is a wide and deep arc with the bottom at April and May of this year and a smaller arc during the month of July with the same resistance at $11.70

ETJ_JULY30_2014

 

 

 

 

 

 

 

 

 

 

To learn how to take advantage of such a situation and make a nice profit while minimizing risk, download the free report or just buy the e-book already :)

Down Trend Stocks 29 July 2014

Some stocks in a downtrend, $BKE, $PFSI, $SBCF, $TFM

Not all down trending stocks are created equal… Some appear weak and will probably continue downward while others are getting ready to turn around and recover. Can you tell the difference?

Download the free report and I will update you on the expected outcome of these stocks and you too will learn how to read the charts and forecast and use that knowledge to profit in the stock market.

TFM_JULY29_2014 SBCF_JULY29_2014 PFSI_JULY29_2014 BKE_JULY29_2014

Stocks ready for a breakout

The new auto filter tool at chartly is being developed and tested using recent stock data.

One of the nice filters is a break-out pattern where the stock is near it’s yearly high price and might penetrate it soon. If that happens on a significant volume, it could mean the stock will go higher still.

Here are the 3 stocks with this pattern as of today.

$CHA, $VFC, $BEN
CHA_JULY28_2014 VFC_JULY28_2014 BEN_JULY28_2014

 

The usual disclaimer

A stock ranking for July 2014

The new list for July 2014 has some new stocks in it!
As always, here is the top 30 and the rest is at the complete spreadsheet in a google document.

Company name Symbol Market cap final rank Percentile
USA Technologies, Inc. USAT 75.02M 1 0.04%
Nordion Inc(USA) NDZ 772.63M 2 0.08%
Breitling Energy Corp BECC 409.25M 3 0.12%
Autobytel Inc. ABTL 110.42M 4 0.16%
Sino Agro Food Inc SIAF 60.71M 5 0.20%
PulteGroup, Inc. PHM 7.58B 6 0.24%
magicJack VocalTec Ltd CALL 243.05M 7 0.28%
H&Q Healthcare Investors HQH 749.41M 8 0.32%
King Digital Entertainment PLC KING 6.30B 9 0.36%
H&Q Life Sciences Investors HQL 318.44M 10 0.40%
Overstock.com, Inc. OSTK 362.11M 11 0.44%
Yongye International, Inc YONG 357.33M 12 0.48%
Royce Value Trust Inc RVT 1.16B 13 0.52%
Whiting USA Trust II WHZ 233.68M 14 0.56%
PDL BioPharma Inc PDLI 1.51B 15 0.60%
WCI Communities Inc WCIC 491.73M 16 0.64%
iShares NASDAQ Biotechnology Index (ETF) IBB 5.29B 17 0.68%
The St. Joe Company JOE 2.20B 18 0.72%
SandRidge Mississippian Trust II SDR 411.23M 19 0.76%
Alaska Communications Systems Group Inc ALSK 84.93M 20 0.80%
Dow 30SM Enhanced Premium & Incm Fd Inc DPO 386.38M 21 0.84%
Entravision Communication EVC 543.58M 22 0.88%
Adams Express Company ADX 1.30B 23 0.92%
Chesapeake Granite Wash Trust CHKR 500.22M 24 0.96%
Delta Air Lines, Inc. DAL 31.34B 25 1.00%
Sandridge Mississippian Trust I SDT 138.60M 26 1.04%
Brunswick Corporation BC 3.87B 27 1.08%
Eaton Vance Enhanced Equity Incm. Fd. II EOS 647.16M 28 1.12%
Magnachip Semiconductor Corp MX 563.85M 29 1.16%
TiVo Inc. TIVO 1.47B 30 1.20%