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Sep 24

What I’m Looking at This Week

As you know if you’ve read my blog recently, I’m not a big idea-sharer when it comes to FX for a variety of reasons that you can read here if you’re interested.

Equites are different.  I trade them much more discretionary-ily (!) and am quite happy to share the charts that I believe have money in them.

Before I start there are a couple of things you should know before you take my pretties as the answer to all your trading prayers.

My Trading Style, and Other Stuff You Need To Know

  • I trade these charts while I’m asleep, so needless to say these ideas are not day-trading ideas.  They are longer term, with a view from a day if it goes instantly pear-shaped, to infinity and beyond!  These trades are not food-on-the-table trades, but have the objective of becoming more like medium term investments.
  • I’m looking to ride trends.  Most often I won’t set a profit target, but use a trailing stop instead.
  • I’m purely technical – and even that is debatable since I don’t use indicators – and most often I won’t know or care what the company in question does.
  • I’m happy to use both daily and weekly charts to trade off, depending on the personality of the stock.  Charts will mostly be weekly.
  • I usually start with quite a small position, then pyramid in quite aggressively once the price moves in my favour.
  • Any stops ideas mentioned are for my own benefit, as I would feel negligent if I didn’t mention some kind of risk management.  They may or may not suit your style of trading.

Alright!  My favourites for this week…Drum roll, please!

$BECN

 

What I Love About It - BECN had its previous high way back in 2006 and has been choppily trending up since 2008.  It has just smashed through its previous high, has tested below and been bought up above that 28 level again.  Depending on your outlook, you could put your stop below that spike, or around the $22 mark if you were looking for a longer hold.  This stock seems to swing around a bit, so the wider stop could prevent you getting shaken out by normal price movement in the short-term.

$DRI

 

 What I love - DRI has been having this weird upwards consolidation period and has now broken out to an all time high.  The “slow-burn” quality of the consolidation leads me to think there is some energy in this and could see some good movement to the upside now that the congestion is broken.

On the daily chart you can see the last daily candle is a gap-up shooting star-slash-inverse hammer, which could be hinting at a short-term reversal so you could either wait for a retest of 55 before buying and risk missing out, or you could place an order above the current price to ensure you only enter in the event the strength continues.  Stops at 51 for the aggressive, or 48 for those who prefer a bit of wiggle room.

$ISBC

 

What I love - Another all time high. This stock previously had a strong resistance level around $16, but has rocketed through with a gap and no looking back.  The daily shows a gap-up doji at the previous high which may signify a reversal, once again I’d put in an order a little higher than the previous high to ensure you’re buying into ongoing strength.  Stops around $15.50.

$NSR

 

What I love - It’s just a really gorgeous chart!  Lots of respected levels make for easy trading and stop placement.  But the thing I really like is that it’s showing some out of character strength.  There was no mucking around in the middle range, and its last test didn’t make the lower boundary at 27. There is some nice higher-low action and the combo of that with the all time high makes it a very interesting chart.

The obvious stop placement is around 30, but that’s quite wide and won’t allow for a big position.  There is also a minor level around 34, which would allow a more meaningful position.

$SPF

 

What I Love – This is one of my favourite equity patterns to trade.  You can see this stock has had 5 years of Stage One (ala Stan Weinstein) basing pattern and has just broken out of it to reach a new high and start a new journey into Stage 2, which is the growth stage.  Once again, the closing candle on the daily chart is bearish, so you could either trade a break through the current high, or wait for a potential re-test of about $6.90 – which may or may not happen.  Stops around $5.50.

One last thought, before you go….

Please, please don’t be like this guy.

“@jimcramer Thanks. Bought $SPF with my entire life savings around a year ago because of your advice. Today it DOUBLED! Thx!”

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