Recapping My Trading Year For 2017

I ended 2016 and started 2017 with a big focus on uranium stocks.  This was because they were ripping out of a Stage 1 base on huge volume towards the end of 2016.  Uranium stocks had been destroyed for the last 5 years so this had the potential to be a monster trade.

The stocks did well for a few months and by taking some partial profits I made money on some of my uranium positions.  But I also held onto a few uranium miners too long as the rally started to fizzle out in March and gave back some profits.  I ended up moving on to other sectors as the uranium miners eventually broke down and went back into a Stage 1 base until the end of the year.

I made huge profits in gold miners in 2016 which enabled it to be my best year performance-wise since I’ve been trading.  But fortunately using my Stage Analysis system I avoided gold miners for the most part in 2017 as they were simply drifting sideways in a consolidation the entire year.  Even when many were turning bullish on gold in September I looked at the charts of many gold and silver miners and saw no volume increase that almost always accompanies a new rally.  You can see that in the chart below of GDX where even though it started rallying back then volume was still well below average.  By avoiding gold miners I was able to trade other sectors that were in strong uptrends in 2017.

One of the other mistakes I made early in 2017 was being a little too focused on uranium.  This made me miss some awesome Stage 2 breakouts early in the year in stocks like AAOI and SQ (shown below).  If I would have diversified and taken trades in those stocks when they broke out, I could have added to those positions at the same time I cut back my uranium positions.  This was a good lesson to learn in that if you see multiple sectors breaking out then there’s no reason not to take trades in each of them, since it’s impossible to know which rally will be stronger.

I applied this lesson for the rest of 2017 and it worked well for the last 4 months of the year since there were so many sectors breaking out such as tech stocks, bitcoin-related stocks, cannabis stocks, and some commodities producing stocks towards the end of the year.

DAIO was my biggest winner for the year and a stock I detailed in the Real Trading Report.  I made money in every stock I discussed on the Real Trading Report in 2017 except for INTT.  This included the tech stocks TEAM, TWTR, COHU, and NVMI.  Many of these stocks have pulled back since November but by selling and taking partial profits on the way up I was able to capture gains in these stocks.  For example for DAIO I sold shares in the 13s, 14s, 15s, and 16s on the way up and now it has pulled back to the 12s, but it is still above the 30-week MA.  If I had not taken profits on the way up then I would have left a good portion of my gains on the table.

Bitcoin was another lesson learned for me in 2017 because I totally avoided it.  I did make some money on some bitcoin related stocks but even then I let a little bias against Bitcoin derail me from staying in longer on some of the trades.  The lesson I’m taking away from Bitcoin:  just trade the charts, fundamental opinions on any market are totally worthless.  It’s amazing how many Bitcoin experts there are now compared to 12 months ago when no one cared about Bitcoin, and the only reason for this is because of what has happened on the chart.  If you apply Stage Analysis properly you can get in early and profitably trade any market, including a totally new asset class like Bitcoin.

For example if you look at the chart of GBTC below it broke out of a beautiful Stage 1 base in May, then consolidated and broke out again multiple times.  Even as late as early November it had another nice consolidation from which it broke out from and more than tripled, and that was after Bitcoin had made some monster gains for the year.

Even some of the “Bitcoin” stocks which many could be nothing more than scams could have been traded easily with a system like Stage Analysis.  If you look at RIOT below it broke out of a beautiful Stage 1 base in late September.  Then consolidated for a few weeks and had another monster run after breaking out above the 8-9 area.

The last two months of 2017 the biggest winning sector besides Bitcoin has to be cannabis related stocks, and fortunately I’ve been all over this sector.  I highlighted ACBFF in a post in November and this stock has blasted off along with stocks like TWMJF and APHQF, all three of which I traded.

This sector has been a great example of how stocks in a hot sector break out at different times, I’ve traded probably at least 10 other cannabis related stocks over the past two months since so many of them have broken out of bases but not at the same time.  When I’m scanning and evaluating stocks in a sector I’m always on the look out for stocks that haven’t broken out yet if they are in a strong sector where most of the other stocks have already moved.  A strong sector can lift all boats including stocks that lag, and sometimes the lagging stocks can turn out to be just as big if not bigger winners than the initial stocks that start breaking out first.

I recorded a cumulative 50.4% gain for my trading in 2017 which was 31% higher than the S&P 500 at 19.4%.  The most important lessons I’m taking away from 2017 are:

  • Taking partial profits on winning trades is an absolute necessity
  • If multiple sectors are breaking out of Stage 1 bases diversify across them.  It’s possible some won’t work out while others will, but impossible to predict
  • Just trade the charts and the Stage Analysis system, they can be applied to any market and have no bias
  • Opinions, fundamental analysis, and predictions are not useful and should be ignored

I have no predictions for 2018 and I would highly encourage anyone reading this to ignore every single prediction they read anywhere since none of them are necessary or helpful.  For example no one predicted what happened to Bitcoin this year but that wasn’t at all necessary to make money on Bitcoin.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

Cannabis Stocks Break Out Of A Year Long Consolidation

The three main cannabis stocks that I follow exploded higher on massive volume increases over the past couple of weeks.  Not only that but their recent moves busted them out of a year long consolidation in a very bullish manner.  All three of these stocks were 5 to 6 baggers in 2016, and spent about a year consolidating those massive gains.

Canopy Growth shown below broke out above 10 and has done over 4x average weekly volume the past two weeks.

Aphria is breaking out of the former highs in the 6 to 7 area on over 2.5x average weekly volume the past two weeks.

Aurora Cannabis has had a volume explosion over the past week doing over 5x average volume and breaking out above 2.5.

It’s important to note these stocks are all major Canadian cannabis producers with over a billion dollar market cap.  There are many more speculative cannabis related stocks that are nothing more than management teams with plans and dreams that may or may not turn into anything.

I’m long APHQF and ACBFF as of this writing.  I plan on doing follow up posts on this sector as this appears to be a major breakout that could last a while.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

Semiconductor Shares Slammed After Earnings

Many semiconductor stocks have had a rough time after earnings.  AMD, UCTT, FORM, AEIS, and now RTR position NVMI have all been hit.

While NVMI is still in Stage 2 I’ve decided to close out my position in the stock tomorrow.  Fortunately I reduced position sizes in all of my stocks that had upcoming earnings.

This allowed me to take profits in stocks like NVMI and COHU ahead of earnings.  NVMI was up over 20% since I mentioned it in the first RTR.  I’ll take a small loss though on my remaining shares in NVMI unless it moves a little higher tomorrow.

I’m also going to close out COHU and INTT tomorrow.  They both have earnings after the close tomorrow, and based on the way other semiconductor shares have traded I’m not sure its worth the risk holding into earnings.  I have no idea how those stocks will trade after earnings, they could go up or down.  COHU I’ll take a small gain on and INTT I’ll be taking losses on.  INTT hasn’t traded well since it gapped higher and it has closed the gap since then, and it is about to fall below the gap support.

It’s certainly possible these stocks just consolidate and keep moving higher.  But since I have other trades that are working better (DAIO, TEAM, TWTR), I’d rather either add to those positions or find other setups without the overhead resistance that now exists in these semiconductor shares.  TEAM and DAIO especially are turning into monster winners, and TWTR is trading well so far the week after it surged higher.  It’s quite possible we are seeing a rotation out of semiconductor names after earnings which isn’t surprising since they have been performing so well.

Had I not taken any profits on the way up in NVMI I’d have nothing to show for it after holding for a couple months.  Which is another example of why I’m a big fan of taking partial profits off the table when you get them.  All of the positions I take in stocks I trade in increments, if a stock continues to go up I will increase my position size but also take a portion of the profits and reduce position size when I get them.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

 

Why I Bought Twitter After Earnings

TWTR shares exploded higher last Thursday on a big increase in volume after their earnings report.  TWTR has been an abysmal stock since its IPO in 2013.  It had erratic price action after the IPO, which is often a sign of topping action, and then a Stage 4 downtrend in 2015 leading into 2016.  It has since been in a Stage 1 base in 2016 and 2017 with a few false breakout attempts, which is the frustrating part of Stage 1 basing action.  For example we’ve seen a lot of frustration in the commodities sector over the last year as those markets continue to grind sideways and produce fake breakouts.

TWTR did 222 million shares of volume last week which is over 2x average weekly volume.  That’s the kind of volume to look for in a new Stage 2 breakout.  If TWTR does another week of over 2x average volume over the next week that’s an even better sign.  TWTR is also finally starting to outperform the S&P 500 which is what you want to see in potential big winning stocks.

Risk-reward wise I don’t want to see TWTR fall back below 20 since that zone has been resistance during the Stage 1 base.  The overhead resistance created from the Stage 4 downtrend in 2015 should be minimized now that the basing action has gone on for so long as weak hands sell to stronger hands.

Wall Street hates TWTR as evidenced by the ratings on the stock shown below.  This also means if TWTR does start trending higher a lot of money is on the sidelines missing out, which could turn into new buying pressure.  TWTR also has an 8% short interest against the stock.  Not surprising to see so much angst against a stock at the bottom of a bear market.

Source: Finviz.com

TWTR is new edition to the Real Trading Report series that I launched in September.  The first stock I mentioned in that report was DAIO which exploded higher on Friday after earnings.  I’ll do a follow up on that stock (which I increased my position in after earnings) this week.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

RTR Update – TEAM Soars After Earnings

TEAM absolutely soared after earnings on Friday up 24.7% on the day on massive volume of over 7 million shares.  Average daily volume was running at about a million shares so that is 7x the average.  That is around 300 million dollars of stock trading hands which likely means that big institutions are loading up on the stock.

I increased my position size in TEAM after earnings were out.  I put two orders to buy more shares of TEAM below 45, where it was trading around after hours on Thursday, and was lucky enough to get filled on both orders at the start of trading Friday.  I also bought one more lot of shares in TEAM at the close on Friday since it was not giving back any gains for the day.

TEAM is now up almost 30% since I added it as an RTR position on 10/8.  This stock is exhibiting all the characteristics you want to see for a Stage 2 stock that can make big gains:

  • Leading stock in a leading sector (enterprise software)
  • Outperforming the S&P 500 while the S&P 500 is in an uptrend
  • Under accumulation by the institutions
  • No overhead resistance

Depending how TEAM trades from here I may take some partial profits if it gets too extended from the 30-week MA, but I will definitely be holding shares for a longer term move higher.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.