How do you perfectly time stock buys with the industry turnaround?
How do you perfectly time stock buys with the industry turnaround?
CUE provides visual analytics in real-time that are unambiguous to help make such decisions.
Here is a live example.
The gold (mining) industry is among the top 20% both in terms of Score and Pace. That is a strong and turnaround industry.
It is the best performing among peer stocks that are showing both Fund Accumulation and a Short Squeeze Potential (I checked that out using CUE Vital peer analysis). 100% of peer stocks are up today.
$GFI is giving a GAP long setup. It is also displaying squeezemove and fanout patterns. The squeezemove is associated with BigMoveUp3 extreme bullish momentum and also a bullish Pressure. Some buying is going on indeed. And the stock is up by more than 7% today as of this post. One possible objection to the buy right now is that it has Memory trendline resistance right above the current price in both daily and weekly.
A prudent entry may be to wait to see if the price goes above those resistances (maybe in this week itself) and then buy the stock.
For a short-term/swing trade, I would favor waiting for the Memory line to be crossed before taking a long position.
For longer-term strategies (shorting the put, for example), other options may be available right now, without waiting for the Memory to be broken.
Lets follow up to see how $GFI did since I shared my bullish view.
A query we have to answer now is how to manage the position if you took a bullish position based on the original analysis?
If you used CUE Vital in real time right now, you will see that though $GFI is up by more than 3%, most of the peer stocks are down. That shows the accurate selection of $GFI instead of another gold mining stock in my original CUE analysis.
What about $GLD, the commodity? It recovered in a downtrend from a Memory trendline and is down today with a bear Release signal. Yesterday $GLD displayed a barish Indecision at the top. Relative Performance shows $GLD is underperforming the market.
The broad market as of now is mixed. $RTY is down considerably wheresa others are up. The market is indecisive - the same view that I tweeted over the last weekend.
With the above insights in real time and with the fact that the short put position had more than 35% profit, one may decide to manage the position and not just leave the position on to hit the initial target of 50% of initial profit.
One way could be to book partial position profit. Other could be to not let the trade go into loss from now onward.
My approach is always try to take some money off the table when I have some indesicivenes about the stock/stock peers/commodity related to the stock/broad market. I did the same in this case too. From now, the trade as a whole is guaranteed risk free.
How would you approach the trade management in such a case?