MetaStock SPRS Series - Week 25 - Set Watchlists Up During the Summer for Position Trading in the Fall & Winter - July 18, 2011
By: Martha Stokes C.M.T.

It is not too early to start setting up your watchlists for the Fall –Winter Trading season. Fall and Winter trading is where some of the largest most profitable trading occurs. To be ready for the season as a position trader, you need to start now so that when stocks start moving you are ready to go.

Setting up a watchlist is all about finding stocks that have potential for strong upside growth with high target gain potential. You want to find stocks that have recently completed a short term or intermediate term bottom such as KAI has below, with quiet accumulation patterns.


Chart 1

KAI makes a good watchlist candidate because it is still a very low priced stock and has plenty of upside target gain potential for a position or even intermediate term hold. The all time high for KAI was around $100.00 so it is still a bargain at 30-35.

At this time it is resting below a strong resistance level seen on the weekly chart below. Yearly highs can pose problems for stocks and plenty of resistance. What you also need to incorporate into your analysis is some of MetaStock’s wonderful Fundamental data. This stock will move up once the financials show strong improvement.


Chart 2

Watchlists can be fun to build. It is an easy way for busy people to keep track of stocks that are not ready to buy yet, but will be in the near future.

Keep your watchlists to 20-40 stocks and then check them periodically to see how they are progressing on overcoming their resistance levels.

You will begin to see a change in Volume with green volume much larger than red volume and well above the EMA line. And you will begin to see plenty of Green bars on TTQA which signals early that quiet accumulation is occurring in the stock. Remember that quiet accumulation by giant funds doesn’t move price much if at all. That is because institutions who buy large lots use a controlled bracketed order so that their fill is within their specified range. The only way to find quiet accumulation without doing it manually through fundamentals is to use an indicators such as TTQA to expose this surge of large lot activity that is hidden from most market participants via dark pools etc.

Stocks like KAI tend to bolt out of sideways patterns and move quickly so be sure and use an entry buy that gets you into the stock prior to a big run or gap.

We are likely to see more gaps after the summer when trading picks up again.

Trade wisely,

Martha Stokes, C.M.T.
Member of Market Technicians Association
Master Rated Technical Analyst: Decisions Unlimited, Inc.
Instructor and Developer of TechniTrader® Stock Market Courses
http://technitrader.com
MetaStock Partner

(c)2011 Decisions Unlimited, Inc.

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