Practicing Stan Weinstein's Method
- Thread starter traderprg
- Start date
Good question!
You are right about the previous spikes and they are perfect resistances. Besides the 30W MA and large base, What attracted me to jump in earlier is the huge volume comparing to the previous spikes. If I don't want action, It is safer to purchase REDF when it also breaks the previous resistance with continue volume increase.
I will give REDF another 2 weeks to verify the breakout.
I've been trading with Weinstein's method for the last four years and have had the same stocks that you've been trading come up in my watchlists too.
A few on my watchlist at the moment are:
SIFY - in Stage 1, and has been basing for the last few years. Volume beginning to expand as it's moved towards the top of the Stage 1 range. It's quite volatile, but the relative performance line versus the S&P 500 has just moved above the Mansfield zero line also, so it has potential for a move into early Stage 2A.
CENTA - in early Stage 2 attempting to make it's first continuation move above resistance on more than double the average volume. Relative performance is also improving and is above the Mansfield zero line.
MMYT - attempting to make a Stage 2 continuation move on strong volume of more than 5 time the weekly average. Strong relative performance also.
A few on my watchlist at the moment are:
SIFY - in Stage 1, and has been basing for the last few years. Volume beginning to expand as it's moved towards the top of the Stage 1 range. It's quite volatile, but the relative performance line versus the S&P 500 has just moved above the Mansfield zero line also, so it has potential for a move into early Stage 2A.
CENTA - in early Stage 2 attempting to make it's first continuation move above resistance on more than double the average volume. Relative performance is also improving and is above the Mansfield zero line.
MMYT - attempting to make a Stage 2 continuation move on strong volume of more than 5 time the weekly average. Strong relative performance also.
Four years! Has it been a big success, If you don't mind me asking?
What's your trading style, investor or trader?
Initially I was going for the investor role because it requires less time and is less stressful. But the market is a lot volatile than the time when Stan wrote his book. I feel It's better to take some profit before the market makes a quick turn. Plus I get bored and want some action too. Guess I am leaning to the trader role..
Nice watchlist!
SIFY's chart looks very similar to REDF's, though SIFY is a lot choppier in recent time.
CENTA is a valid buy but I think it's not a A+ stock because the growing room is limited due to the 2012 high.
MMYT is probably buyable now. Are you in it already or waiting it goes up a little more for confirmation?
BTW, was RDI on your watchlist? It came up from my screener two weeks ago and I picked JGT over it.. looks like a bad choice
It has been quite successful for me, although it took a lot of experimenting and studying to get to point I am at now as I made a lot of mistakes earlier on as I was trading both trader and investor methods and trying to find my style. From August last year was my first serious attempt at trading the investor method solely, and I managed to bank 26% profit between then and March this year. Although I was close to 50% at one point early in year as two of my positions ADEP and PLUG were really flying high, and I got greedy and held on a little too long in PLUG and only ended up with 157% profit instead of the 330%+ it got too from my entry point. But, lesson learned, and so will hopefully not repeat it, and take some off when a stock I hold goes parabolic in future.
I spent a few years experimenting with the method and studying it before I came the conclusion that I already knew when I started, that the investor method was what suited me, as I don't have the time necessary for the trader method and don't need the action every day. As I'm quite happy to sit through a Stage 2 advance for 6 months+ and not get phased by the significant pullbacks towards the 30 week MA along the way.
I can see from your posts that you are definitely in the trader method camp, but you are using the investor method Stage 2A breakout point. Which is fine, but Weinstein recommends that people using the trader method do the majority of their buying in stocks that are already in strong Stage 2 advances and have consolidated for a few months above a strongly rising 30 week MA (See "Ideal Buy for Trader" Chart 3-3 from page 62 of the book below).
The investor method Stage 2A breakout point (see "Ideal Buy for Investor" Chart 3-1 on page 60 of the book above) is much more likely to be tested as it's the beginning of the Stage 2 advance, and so the initial breakout that you are playing will often pullback the whole way and little bit further even before forming the secondary investor entry point and then moving higher and making it's first continuation breakout above the initial high. From my experience this is one of the best places for a trader, as the stock is just coming out of the Stage 2A phase, and moving into a the main Stage 2 phase, and it also gives the trader the chance to judge the initial Stage 2A breakout and subsequent pullback. i.e. did it meet the volume requirements on the breakout week and then continue to have strong relative volume in the weeks following as it advanced higher? Then once it reached it's initial high, did the volume contract significantly on the pullback to retest the Stage 2A breakout level? Did the relative performance versus the S&P 500 breakout above it's zero line on the breakout, and continue to show strength throughout the pullback etc.
So the trader can judge the initial Stage 2A phase and then get into the A+ candidates with less risk.
MMYT is probably buyable now. Are you in it already or waiting it goes up a little more for confirmation?
BTW, was RDI on your watchlist? It came up from my screener two weeks ago and I picked JGT over it.. looks like a bad choice
I'm not in MMYT, but am considering if it can close the week above the breakout level near the high of the week.
RDI came up on my watchlist back in late February as one with potential for a trader continuation, but I lost track of it after that. Looks like it's had a good run.
The best looking trader continuation I had on my watchlist this week was BDSI - which I highlight on my thread on the Stage Analysis forum on Wednesday at 11.42, and it has continued to look strong since.
Cheers
Iâm looking at BBRY as a possibility.
My investing time frame for this position is long term although I will take a loss if I get a sell signal.
I developed a fairly simple method to enter and exit trades after reading Weinsteinâs Book. I use the cross of the 30 ma as a signal. But donât enter or exit a trade until the signal is confirmed by a breaching of the last swing high or low.
For a buy signal I look for a swing high above the 30 wk ma. I will enter a position if there is a weekly close above that swing high.
I hope the attached chart shows what I mean.
My investing time frame for this position is long term although I will take a loss if I get a sell signal.
I developed a fairly simple method to enter and exit trades after reading Weinsteinâs Book. I use the cross of the 30 ma as a signal. But donât enter or exit a trade until the signal is confirmed by a breaching of the last swing high or low.
For a buy signal I look for a swing high above the 30 wk ma. I will enter a position if there is a weekly close above that swing high.
I hope the attached chart shows what I mean.
I can see what you are thinking with it, but it breaks a fundamental rule of Weinstein's method which is not to buy a breakout with strong near term resistance, which it has between 9 and 11 zone. And it would also still only be in Stage 1 following the breakout from the minor base you've highlighted, as the Stage 2A breakout level wouldn't be until it clears the February swing high currently imo.
Also if you are looking for long term trades you should consider the monthly chart as well imo, as it also needs to be improving and moving into at least an early "monthly" Stage 1A with a monthly close above the 30 month MA, which is currently at 10.37
I agree; I'll be watching closely at that resistance. mind you a $1.50 to $2.00 move would be a decent short term return. And if it manages to get by $11.00 a double isn't out of the question.
I'll have to dig out my copy and re read. Thanks for the feed back.
Reread Chapter 4 on page 96 onwards (The less resistance the better) as it explains very well and brings up a key point about opportunity costs.
I'll take a look.