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Analyzing Some Big Trades of 2015

In this video I go over some big winners of 2015.  You’ll notice that all of these stocks broke out of a Stage 1 base on a big increase in volume, which is the ideal time to enter a trade.  Some of them provided a secondary buy point on a re-test of the 30-week moving average, but others continued to rip higher after the initial breakout.  Here’s some other points on the video:

  • I go over why 2015 was such a tough year for trading the long side (Hint:  Not many stocks breaking out of Stage 1 bases)
  • AMZN and NFLX are shown discussed.  Notice that the media was not talking about these stocks when they broke out earlier in the year, which is where the opportunity was.  The media is now obsessed with these stocks, and they aren’t great opportunities anymore because they are way past the ideal buy point.  This shows how treacherous following the media hype can be.
  • Biotech stocks were doing well in the first half of the year, but ever since biotech has come under pressure you can see that directly in the behaviour of stocks in that sector.  This is a good example of only buying stocks in a sector when it is in a Stage 2.
  • It can’t be overemphasized that opportunities come from breakouts out of Stage 1.  When the entire market is in an old Stage 2 bull market there just isn’t going to be as much opportunity.  This is why hedge funds have gotten taken to the woodshed this year, they are trying to force trades that aren’t there.

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