Thursday, November 4, 2010

Stock selection

Here are the stocks that I am currently watching:

5-minute chart - six days:


There are four stocks that went up from the starting point namely DMC, AGI, MEG and RFM which stayed neutral for the first few days before catching up with the first three. DMC and MEG just started to move up again in this time frame while AGI started to decline.

The other two stocks went down from the starting point namely AEV and AT while AP still remained flat.

The divergence among the stocks is probably a sign of potential for rotational plays.

The flattening of AP is probably a good sign for positioning.

Let's see how they all go by next week to see if I am correct in my assumptions.

Now, looking at their daily chart - six months:


It seems that RFM outperformed every stock on my list with only DMC catching up with it lately, all thanks to that two weeks or so consolidation.

AP is under-performing amongst the stock selection together with AT. Let's see how they perform this month and see if I am right on betting on AP.

Holding Companies:


Here is a possible rotational play for swing trading as there seems to be a slight divergence with AEV and AGI. Meanwhile, DMC is outperforming both.

Other Sectors:


Here is a possible rotational play for swing trading as there seems to be a slight divergence lately with AT and MEG. Meanwhile, AP is currently underperforming from both stocks although it still trending up but at a relatively slower pacing.

There's nothing to compare with RFM as it outperformed every other stock on the list.

Conclusion:

Swing trading rotation:
AEV-AGI
AT-MEG

Position trading:
AP: moderately conservative, swing-trading would be relatively unproductive as it doesn't seem to decline significantly during corrections. It seems that implementing a buy and hold strategy is best.

DMC: moderately aggressive, swing-trading would be slightly unproductive as cost seems to be only slightly lower from the swings that it produces during its corrections. It seems that implementing a buy and hold strategy is best.

RFM: aggressive and slightly speculative. Swing-trading would be relatively productive as it declines relatively during corrections which is more than enough to cover costs.

*IF AP - the underperforming stock - catches up with RFM and DMC, that would be more than 60% potential upside.

Hope I'm right in this.

No comments:

Post a Comment