The StockDomo.com Real Money portfolio from 3/28/2017 to 5/16/2017, performed an average of 6.6% per trade, and a return of around 12% during this time period, while the S&P 500 performed 2.6% during that time. The StockDomo.com Real Money Portfolio outperformed the S&P 500 by almost 10% during this time period. (If calculated by dividing the profit by the original portfolio amount, as of 5/17/2017, the return is close to 12%.)
In general, the Buy Strategy I used is the “Stock went above 52 Week High with Above Average Volume”. StockDomo.com provides automated trading ideas using different buy strategies. There is a list of potential candidates. I filtered out any ETFs, and stocks under $2. Also, I filtered out any stocks which were bought out or stocks which were overextended from the 50 day moving average (50 DMA).
I favored stocks that broke out over the 52 Week High but remained within a reasonable distance from the 50 DMA. I also favored chart patterns where the stocks are above both the 50 DMA and 200 DMA and a chart which keeps on going up and to the right. I also looked at the fundamentals of a stock and looked at PEG Ratios (Price Earnings Ratio divided by the estimated growth. Any number under 1 is a great value.) I favored momentum stocks that had good earnings, or were running up on anticipated earnings.
My sell strategy is still evolving. Some of the recent reasons to sell include:
- The stock losing money or stagnating for too long.
- Need the money to find better trading opportunities.
- Stock appears to have gone up too much too soon and was overextended.
Individual Trade Reasoning:
- BEAT: Bio Telemetry showed up on my “High Volume went above 52 Week High” Breakout screen. The stock chart looked like an up and to the right type of steady climb. The fundamentals looked decent, and the stock didn’t seem to be overextended over the 50 DMA. I decided to sell because I had a profit of 5.9%, the Point and Figure technical chart warned of a Bearish pattern, and I wanted the money to use for other trades and good opportunities.
- ALSK: Alaska Communications Systems Group Stock appeared on my “High Volume and went above 52 Week High” Breakout screen. The chart pattern showed a definite breakout, and stock seemed to be in range of the 50 DMA. The stock price was around $2.15, and I knew the stock at that price could be volatile and I knew the risk. When I had a 16.3% profit, I decided to sell because the stock went up too far too fast, and I also wanted the money to put in new trades.
- BLDP: Ballard Power Systems appeared on the same screen I’ve used. The stock had a similar pattern to ALSK, and the stock was around $2.93 when bought. This low price meant that there would be great volatility and risk. The stock was sold for a -5.5% a few days later because there was a loss, and there were other opportunities I wanted to get into. With hindsight, BLDP continued to go up 10% from the original buy point, but no one can predict everything, and nothing wrong with taking the quick loss. Also, the buy point may have been too late as it may have been too far extended from the 50 DMA.
- LRCX: Lam Research had the same up and to the right pattern, and the Fundamentals looked great, and the chart didn’t show a large overextension over the 50 DMA. The stock has been doing well and I may continue to hold.
- ISRG: Intuitive Surgical showed up on the screen and had the same up and to the right chart pattern and the stock had just broken out. The stock has been doing well and I may continue to hold or consider taking profits soon.
- BABA: Alibaba had the same breakout and up and to the right, and the stock didn’t appear to be overextended over the 50 DMA. The earnings were good. The stock is performing well and may be worth a continued hold. BABA’s fundamentals may mean that it could a longer term investment as well.
- HON: Honeywell is another breakout stock and it was worth a try. The stock is currently returning only 1.5%, and this could be a candidate for selling to put it in new opportunities. Looking at the chart, there’s resistance at $135 (It is currently at $132 right now) and selling near resistance is a possibility too.
With StockDomo.com, you too can create your own trading strategy with the help of StockDomo.com Automation and Intelligence. After each trading day (around 6:40 pm Pacific Time), there will be a list of potential Buy Signals based on a number of Buy Strategies. You can decide how to trade with that information. StockDomo.com will also keep track of performance of previous Buy Signals automatically.
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