Hello again!

 

So my model got shaken out pretty badly this week, but that's life. Obviously not every signal will work, and it's important to cut those losses before they slip away further!

 

I do trade stocks in addition to the TQQQ, and have been tinkering with watchlist creation over the past few days.

 

My current watchlist is what I call a Poor Man's 250, which consists of 15 fundamental CAN SLIM-esque screens whose lists are then ranked based on who appears the most often. The size usually ends up being 10-15 names long. Along with the pocket pivot buy rules I use, provides a decent trading frequency.

 

Noting the lack of growth stocks  providing gains lately, I was reminded again of Mark Minervini's (@markminervini) book "Trade Like a Stock Market Wizard'. In it, he first looks at technicals, then fundamentals, which is completely backwards from the CAN SLIM methodology. This is approach is definitely interesting and script-able in MATLAB.

 

There were of course more detailed aspects of his process that aren't easily automated, therefore I whittled down his requirements to what was attainable and provided a list in the spirit of what he's looking for:

  1. Stock is in an uptrend (moving averages are unwrapped and price above all of them)
  2. Within 25% of 52-week-high
  3. IBD RS > 70
  4. Earnings and sales are both accelerating
  5. Estimates for current and next are revised upwards (scraped from yahoo)
  6. Stock consistently has upwards earnings surprises (scraped from yahoo)
  7. dollar*volume > 10M$ (this is my own addition)

 

The final list I got for today is below. I have to say, only ALGN is something I've seen before in my CAN SLIM watchlist. These don't seem to be names overpumped on Stocktwits or Seeking Alpha nor do they seem much talked about by IBD themselves. I will trade these in a separate account I tend to use as a sandbox, since it's small and locked-in until I'm old and gray. Performance will be interesting as I think it will get me into CAN SLIM stocks when they're ripping in a strong bull, but will also rotate me out of them somewhat when they're less in favour into stocks that are trending strongly but do not necessarily meet CAN SLIM standards.

  • ALGN
  • AVGO
  • AVY
  • GD
  • ITT
  • LHO
  • MPWR
  • ROK
  • RXN
  • ST
  • TER
  • TXN
  • VMW

 

ALGN is forming a nice cup and had a fantastic last quarter. I've been shaken out of it twice, but this potential breakout, which would also comes after a base reset, looks like it's coming out of a very mature and tight base. It managed to stay above the 50day Friday as well.

 

GD is also interesting. It's subsidiary, Gulfstream, is selling its new sleek and fast G650 like hotcakes, and are sold out for the next 4 years. Used ones are selling for more than list price because of the desire to have it now. Gulfstream has grown from 1/5 of GDs revenue to about 4/5 due to this jet, and I couldn't be more proud to be a part of its development (flight computer). I might as well make some coin off its stock, too, right? GD is great with advertising, product placement, and their planes are a metaphor for the top 1% who can afford it. Notable owners were/are: Bernie Ecclestone, Sawari father and son, Walmart, Exxon, Dicks Sporting Goods, Peter Jackson, Honeywell, Qualcomm, a Saudi prince. Rumours are Oprah might trade in her Global XRS for one of these. I figure this fits the 'N' of CAN SLIM quite well!

 

Catch me on twitter/stocktwits: @rocketpower