Stock Scanner Example 6

In this week's update I'm going to give you another mega-trending stock, but first I'm going to go over the performance of this strategy in a more scientific method. Below is an image of a spreadsheet that I have created that will be used from now on to give us a better of idea of the status of my picks.



The average gain, which is 1.01%, is a simple average, and not a time-weighted average. But no matter how you calculate it, it is not particularly impressive. However, keep in mind that 80% of the stocks were long positions, and the markets in North America have performed very badly. For example, the Dow Jones Industrial Average had its worst week in 5 years two weeks ago, and the TSX in Canada has lost over 7% in just the last 2 weeks.

In addition, this spreadsheet does not take into account statements, like the one I made for RCI/B, saying that I would wait for a pullback before buying this stock, as the risk was too great at the time of posting.

I'll keep posting this spreadsheet every weekend when I update this blog, and I'll let you be the judge.



Anyway, here is this week's stock:



I had to go through about 30 stocks before I found this one, and when I saw it, I knew it was perfect. This is a textbook example of a stock that I am looking for. Notice how it bounces off its dashed 50 day moving average line every time there is a counter trend rally. That's a sign that the bears are totally in control, which is what we want when we short sell.

However, since anything could happen, we must protect ourselves from losses. Therefore, we would place a buy stop above the 50dma, so that if the stock breaks through this line, we would no longer be in the position.

Since this stock is below $5.00, you may not be able to short sell it, however, you could set up a position using equity options.

So, thanks again for looking at my blog. I'll make another post in 7 days.