Earlier today I took a look at all the past predictions I made and did sort of a follow up. I’ve had this gut feeling that my analysis wasn’t far off, but the timing was poor. If I traded how I predicted, and week by week, I’d probably be breaking even, aka not very well.
Here’s one that stuck out to me. NLY, from week 4. I said that was in a definite trading range, and that if it broke out, either way, it would be a good opportunity to trade.
The break out of the trade was around 16.30. The low, depending on where I would have gotten out, would have been in the triangle of small resistance/support, which was anywhere from 15.88 and 15.60. It’s not a huge trade, but around 3%, which is better than a missed opportunity.
Because of this, I think it is best, in terms of practicality, to limit the scope of trading to a more manageable size. How should I manage this?
I think if I’m going to be trading based on technical analysis, I should look for stocks that are “well behaved”; in other words, I shouldn’t be dealing with stocks that gap everywhere or that just don’t move. So more volume=better. I went to nasdaq.com and compiled a list of the most active stocks. Also, since these tend to be more well known companies, it’s easier for the average person to get a better handle on what it is that the company does. The list:
- MSFT (Microsoft)
- QQQ (Powershares QQQ trust)
- MU(Micron technology)
- SIRI(Sirius xm radio)
- INTC (Intel)
- AAPL (Apple)
- ORCL (Oracle)
- CSCO (Cisco)
- RVBD (Riverbed Technology)
- SNDK (SanDisk)
- YHOO (Yahoo)
- HGSI (Human Genome Sciences)
- QCOM (Qualcomm)
- ZNGA (Zynga)
- HBAN (Huntington Banshares Incorporated)
- FITB(Fifth Third Bancorp)
- GILD(Gilead Sciences)
Since it seems like a lot of these are in the tech industry, it would probably be a good idea to trade other tech stocks that have fair volume.
Speaking of trading stocks in the same industry, it’s probably a good idea to keep a good track on them. I recently heard of these things called ETFs and it turns out that there are (at least) 2 etfs for the semiconductors, 1 bull and 1 bear, SOXL and SOXS.
So if I limit myself to the top 10-20 stocks in volume, the top 4-5 in each of their industries, and any etfs, I think it’ll be a more manageable amount. There’s still a lot of room, but it allows me learn a lot more about the stocks.
As for predictions, I’ll just pick one. I think INTC is going down for the week. It’s been in uptrend, and there’s a bearish reversal that looks prettty solid to me. The only thing it’s really missing is the confirmation candle which should appear tomorrow. Perhaps it’s faulty because it’s in a gap down position and not at the very top? I don’t know.