The markets are experiencing a bullish run higher in price since they bottomed in June of this year.
Some folks get nervous opening up a new option trade or even investing in securities believing the market has already run as high as it will, and they freeze sometimes thinking they missed the move.
The question then is, so you are waiting for the markets to be in a sell off and trading lower before you take action? Isn’t it also possible one freezes thinking they can’t buy now because the markets could trade even lower?
Jump on a Strong Stock’s Bandwagon
With information comes confidence. There is a strategy for investor’s that we, as options traders, look at in our analysis and that is the strategy that looks at stocks trading at their 52-week highs and anticipating further higher price action.
It’s like trying pick a major league baseball team to follow and root for.
If you don’t already have a favorite team it isn’t unheard of to see people pick the team that is hot right now. It seems safe to start rooting for the team in first place and winning almost all their games.
Die hard fans of baseball and those that have a favorite team look down on folks that do this calling them Bandwagon fans. They say it as a derogatory term as if that is a wrong thing to do.
Hey, we aren’t here to please others and we can root or who we want and why we want. Same thing with stocks. This strategy says find a hot, top performing stock and ride its coattails while they are performing so well.
Stocks and their 52-Week High
The premise of buying stocks at their 52-week high and invest in or trade it.
The founder of the Investor’s Business Daily William J. O’Neil popularized this approach.
The expectations for the stock can eb whatever you decide, but the last we remember the consideration given with this approach is look for up to a 20% gain an if the stock drops say 8% consider exiting.
My online options analysis tools (www.tomsoptiontools.com) can search up stocks at their 52-Week Highs or Lows.
Log in and do this sequence: Stocks > Stock Analysis > Hi / Low
Set the Wizard (scan) choice to Stocks with Latest Highest Close for Weeks Chosen
Type in 52 and then click Search
Here is the list at the time of the writing of this piece:
Be Prepared Should the Market Start Selling Off
It’s hard to pick tops (and bottoms) in the market. Costly, too. Don’t count on thinking you will be able to do that and know that you may miss the top, but still be able to manage your investment and trades well.
When you see a series of lower high price pivot points and lower price pivot points then the markets are softening up and that may be an appropriate time for you to consider scaling back buying and maybe even consider locking in profits/
Do you invest or trade options? Work with your broker for what you all feel is best for your portfolio and act accordingly.
App: Toms Option Tools
Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.
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This is neither an offer to buy/sell/ or recommend a particular stock or option.
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