A follow through day occurred on June 21st just four days off a low. This was a weak follow through day but none the less a valid trigger. A follow through day tells us “odds favor” buying of stocks at this point in time. Of course follow through days are not fool proof as I have said it just gives us an odds favor point in time to buy. Since that day we have also had three accumulation days with no distribution days with a successful test of the 50 day moving average. See the graph below of QQQ a proxy for the Nasdaq courtesy of www.bigcharts.com
It is not prudent to wait and be sure because then you lose the best opportunities. A preferred approach is to use the money management techniques and risk control we have already discussed. Start initial purchases of very small positions and add to them if the market cooperates and continues its upward move. Remember it can turn back down even with these positive signs and this is the reason you have to start small and raise your stops to break even as soon possible. Once in that position you can continue adding to that stock and also initiate new positions in other companies. If this all fails we get stopped out at break even and wait for the next follow through signal.
Here are a few stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks. Rather the idea is to teach stock selection with low risk advice. You can also catch me on Twitter for more regular updates and YouTube for some educational videos. See links at upper left.
HRC - $47.33
HEI - $55.93
PLCM - $64.90
HLF - $57.85
No comments:
Post a Comment