Friday, February 23, 2007

Going Long

I posted before on some long term holds. I think everyone looks for some of these for their non-day/swing trading dollars.

For fun, Muddy and I put together a watch list portfolio last month. The filter/criteria:
  • Stocks up 25% in the past 30 days on good volume
  • Then looked at the yearly chart to see the long term trend that hadn't violated the middle of the Bollinger Bands
  • Then tweaked the 25% up and down a bit to find a few more
The buy date on the port was at open on January 29, 2007. Four weeks later, here are the results:

The 4 week total return is 175%. Divided by 14 stocks is 12.5% average for 4 weeks, or 13.5% for a month. Compounding based on the rule of 72s, the port should double every 6 months. Booyah! Nice.

Man, I need to offload my mutual funds and build a portfolio like this!

Here are a couple of the charts from this port. Straight up and rarely, if ever, dropped below the EMA 13.


Multiple Streams Trader said...

You've got mutual funds?!?! ;)

Laura said...

Ah Jan,
Stop! HA

Anonymous said...

Hi Laura , I noticed that some stocks in the list violated the 13 ema or middle of BB in the 1Yr chart. Can you clarify as to the criteria to find these stocks? thx

Muddy said...

Sorry for the confusion here.
What we did was look for ones up around 25%+ in the last 30 days or so and looked at a yearly chart BUT we only were really concerned with the few months and how they reacted to the middle of the bb's.
We used a yearly chart just to get a feel for the longer term,seeing that they weren't prone to frequent tanks.

Anonymous said...

As always, thx Muddy for the clarification


Anonymous said...

and how are you enterting these stocks?

Laura said...

Not daytrading here, this is a long port. You just buy them. We don't care about a dime or two difference in entry price when we plan on holding for a few months to a year or more.

MSTrader said...

Everything is looking green in this port! (with the exception of HMIN SYX & SINA) Do you use the 8% stop for your long holds?


Laura said...

Long Port Update:

Hi Jan!

We plan on updating the long port this weekend as it has been 10 weeks since we bought.

We plan on re-balancing every 10 weeks. Cut the losers, maybe add to the winners, and add a couple more. Think we will stick with only 10 stocks in the future. (Unless #11 screams "buy me too").

No stops. Just buy and hold. Yes, we should have stopped out on SYX, and in hindsight, maybe HMIN as an IPO shouldn't have been on the list. But remember, this is just a watch list to have fun with. Maybe we will be surprised with the results at the end of a year.

Rob said...

Hi Laura,
You might want to add DYN to this long term list. Its looking good.
Nice momentum

Laura said...

Hi Rob,

Thanks for DYN. Does look good, plan to add it.

Will post the updated list tonight. (I hope!)

Frank said...

Laura/Muddy, am a bit new to long trades so bear with me. You say, "stocks up 25% in last 30 days on good volume." Do you consider "good volume" to be...above the average on 15 of the 30 days, or what? The only other thing is that the close is PRESENTLY in the middle area of the bollinger bands, right?
Thanks, Frank

Laura said...

Hi Frank,

Nah, we are not analyzing them too much. Just looking for consistent volume, say 300-400,000 shares or better a day on average. Yes, we may have a few with under that, but what we are trying to avoid are ones that go from 300k to 40k. Don't like the low volume ones.

Looking for ones staying above the MA 10, or MA 13, etc. Same thing, not overanalyzing, looking at the big picture since these are LONG picks.

Not in our port, but take a look at RRI. We are playing this one as a Darvas Box play. Averaging in each time it breaks out of a box. First buy at 18.85 on 3/19. Third buy this week. Look at a 6 month chart and see how it has stayed above the SMA 10 the entire time.

Niagara said...

Do you have a Stockfetcher filter for the:
Stocks up 25% in the past 30 days on good volume
Then looked at the yearly chart to see the long term trend that hadn't violated the middle of the Bollinger Bands

Laura said...

Stocks up 25% in the past 30 days

Hi Niagra,

You pretty much wrote it!

We lowered the stock price, days up, or percentage up a little to find charts that we liked.

What I mean is a lot of stocks might have an awesome gain in one month, but it's just a spike. Not all charts look good long term, so we might lower the percentage up to 23% or 22%. We might tweak the days from 30 to 29 then 28.

Bollinger Bands and Moving Averages were NOT in the filter. You have to eyeball the charts.

Anonymous said...

Hi Laura...

I'm just wondering if you're still doing this and what the experience has been over the past 6 months?



Anonymous said...

Hi Laura,

Seems very interesting.

As this post was from 2007, how do you think this technique works nowadays, with the current panorama, and your accumulated experience?

Thanks, and my compliments for this excellent Blog you have.

Laura said...

Was pretty much only shorting in 2008 and stopped following it. Obviously would have been a great method in 2009 since most stocks so beaten down. I may start a new portfolio on this so keep an eye out!