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Learning from a Market Wizard: Swinging Stocks in the Style of Mark Minervini
I quickly checked out Kristjian Qullamaggie yesterday. Gonna have to dig into his videos way more. Looks like there's a ton of great stuff on his website too.
I know the breakout systems of (Qullamaggie/Weinstein/Minvervini) say to buy when stocks break out of ATH's but was curious how you would play the PBL chart. Technically the ATH is $62.90 but it seems to me that the top of most of the range was $55.50ish and I'd be more inclined to treat that huge candle at the beginning of the trading range as an outlier.
I mean, at the end of the day one can trade however the hell one wants, LOL, just curious of how others interpret this
@onetake Kristjan does NOT wait till ATH's or even 52 wk highs to buy. Neither does Minervini. They both regularly take trades on stocks that are just beginning to come up the right side of the base. Minervini calls it a 'cheat' while Kris just calls it a breakout from a tight range. Same principles apply. 55.50ish was the buy point for both MM and KK I think.
PBL wasn't on my radar - looks like it's not listed on US exchanges?
As near as I can tell the spike on the 24th was caused by a fund releasing a positive report on twitter.
Most of the spike took place in the first 10 minutes.
What it does tell me is that there is supply higher up.
It has had a 7 week consolidation and volume has been diminishing.
The break today might be what Minervini considered a pivot pocket.
Other than ATH it checks most the boxes.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Interestingly, though, a few of the other items on @deaddog's checklist match my own. One that stands out in particular is that the breakout bar must be a large, full-bodied candle with high volume. This, actually, is also a form of relative strength; it indicates strong buying interest - at least relative to prior bars, if not also the broad market.
But I don't limit myself to buying new highs. I'm perfectly comfortable buying long base breakouts as well.
No. My assumption is that there is a reason a stock is showing relative strength. Stock prices don’t move based on what I think, they move based on what the collective masses think. These changes in collective opinion manifest as price movement.
I know all of the O’Neil studies show that the biggest winners had high EPS growth prior to making their move, but I haven’t been able to replicate those findings with recent data. Seems that most of the biggest movers from 2020 were pre-earnings.
Fundamentals bore me to death and I haven’t seen compelling evidence that incorporating them into my approach would actually improve my results. I am interested in thinking about catalysts related to legislative changes, global supply chain, consumer sentiment, etc but that isn’t necessarily ‘fundamental’ given that a copper miner with a horrible balance sheet can still see their stock price rise tremendously if there is a big increase in demand or decrease in supply for copper. Always willing to have my mind changed so I’m all ears for your opinion!
I know you were long BHC... what is exciting about their fundamentals? Earning and sales growth both look nonexistent.
Also, how did SEAS look yesterday - meets most if not all your criteria no?
Seems that some potential buys from earlier this week are beginning to show signs of holding higher instead of immediately failing back through the breakout. My view is a yellow caution light. Small size for new buys and it would need to be a VERY compelling setup. Otherwise plan to keep on waiting.
BHC and I go back a long way. I made a lot of money when it was Valiant; My strategy took me out almost immediately when it took it's tumble. Since then I have traded in and out. Fundamental wise it is paying off its debt and should be profitable this year. I also look at ownership and see that both Icahn and Paulson own a good chunk. One service I subscribe to shows it undervalue.
I look at the fundamentals but trade on the technicals. That's why I'm not holding BHC right now. Earning coming up in a couple weeks.
SEAS seems to check all the boxes. Terrible Fundamentals but like you say the chart says it all. The thing about decent fundamentals is it makes it easier to eventually find a buyer. The same service that has BHC undervalued has SEAS overvalued (Simply Wall St.)
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
