Seasonality and Reversals Off of Ytd Lows

[cash123 10]

Just fiddling with a thought.The summer doldrums (July and August) see many stocks

touch their ytd lows.I have been tracking those that trade under $5 and show signs of a reversal ( three days upticking)

 

I've noticed that if their current price after the reversal sets up AND their 3 month high is

AT LEAST double,that some powerful breakouts are available.

 

See KNDI, SCEI,USBI,NEWN,GRO,AERG,ABAT

 

I've always felt like bottom feeding combined with seasonality could be an area to begin

positions..Reservals off of bottoms with tight stops.

 

Now if somebody could suggest a scaling strategy with appropriate profit stops, I

could begin an exit model.

[Do Or Die 10]

KNDI looks good

SCEI looks like a wild beast

USBI - wild beast

NEWN - wild beast

GRO- why buy?

AERG- buy with caution

ABAT- buy with caution

 

Anyways, since you asked for a scaling strategy, a good approach could be:

 

-Decide a stop price at which you will exit all of your position no matter what

-Calculate risk and no. of (tentative) shares if you were to exit at initial stop price

-Buy 40% of position at CMP

-Add 20% at a level close to your initial stop

- add 40% only at a very comfortable price when the stock has moved up significantly and your trailing stop is above the buy price. Regard this as a separate trade when you get such chance.

 

For example in KNDI, suppose you can risk maximum 1000$ and your initial stop is 1.90. Say current price is 2.74. You can buy 40% of 1000/(2.74-1.90)= 475 shares at 2.74

 

1.99 looks a good level so you can add 20% of 1000/(1.99-1.90)= 2000 shares aprox

 

3.0 looks a good level so if the stock moves around 4, you can raise your stop to 3.00 and add remaining shares.

 

PS: add minimum 2 cent slippage for all trades in calculating no. of shares (slippage can bleed you out in such stocks). This is only a raw example, every time you move your stop re-asses your risk.

[cash123 10]

Do or Die:

 

Thanx for responding.

 

I may have misled you. Those companies mentioned had all triggered long position.

My scaling out refered to exit stragegy,not to adding to position.

 

KNDI in @ 1.92 went to 3.30

SCEI in @ 1.35 went to 2.60

USBI in @ 3.58 went to 7.20

NEWN in @ 2.37 went to 4.25

GRO in @ .95 went 1.58

AERG in @ .26 went to .52

ABAT in @ 1.10 went to 1.95

CCRT in @ 2.35 went to 3.40

 

These moves all happened within 3 weeks and sometimes the next day. So,open sell

orders had to be in place.How to do this optimally is my challenge.

 

Too bad, after today it may well be a moot point.:helloooo:

[Do Or Die 10]

Nevermind, all investors have taken a hit (Moment of Truth for Stock Investors) . I'm too busy with my stocks to look at yours.