Oct

Buying Stocks On the Way Up Prevents Premature Speculation

A little refresher for new Research Lab Members. The Trade Plans are set up so that a stock will only hit the Entry on the way up, with a white candle.

A perfect example was OPXA.You may have noticed that OPXA never hit the Entry (white line), never filled and was deleted when the system identified that it hit the stop first (red line).

This is exactly what we want. There will be many trades that never hit the entry and it is imperative that you don’t jump the gun. In order for the plan to be valid the stock must trade at the exact entry price. This is because many plans anticipate a potential breakout and if it doesn’t materialize then we don’t take the trade.

We have had one trade open for a week now and I wanted to show you why it still looks good technically.

THC is in a clear overall uptrend. The breakout to a new high filled the trade by a penny, then the stock spent a few days consolidating before moving back up. This actually provided a second opportunity to get filled at 6.10 on a white candle (see Open Trade Plans).

Today THC hit Target 1, even on a rough day for the overall market. If you are in this one be sure to have your sell order set at your broker to take additional profits at Target 2.

Last night we scanned hundreds of charts and nothing really stood out as “high probability”. So many stocks are overbought and so many charts look ripe for pullbacks. We will not try to chase stocks for the sake of having trades, rather we will wait patiently for the best opportunities to come along. The Trade Plans are designed for stocks that have a good chance of making a 7% to 9% move, so we have to be very selective.

Some days it is best not to trade at all, like today was. Why try and fight the tape when most stocks are moving down from the open? That’s the great thing about the Research Lab. Everything is based on the directional move off the open. If you like to day trade, the Pick Lists provide some good candidates. More on that soon.

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