Wednesday, September 29, 2010

Interesting Homework Assignment






Trading over the years i could not help but notice how once a stock gains enough momentum and starts to accelerate higher this momentum will tend to extend itself and keep a stock in motion(most of the time longer than many of us think!!)
Here's what i noticed: Often times once a stock hits $90 for the first time, then chances are high it will hit $100 shortly after. For you guys who can back test this theory please do a back test run and experiment with it and see if this theory works. I have a hunch you will be impressed with the results but only a back test will ensure accuracy in these findings.

Make that your homework assignment!

Please leave a comment and share your thoughts and/or findings!

cheers.

2 comments:

redjnr said...

Hey Stewie,
I thought this was an interesting assignment when you posted it so I went back and looked at some charts and it really was interesting. I was looking for a WEEKLY close above 90 and then a intra-WEEK touch of 100 and I must say the results were impressive. I used a Weekly chart of 5yr history so more was incorporated than the Mar'09 run. What is more impressive is the stocks FIRST Weekly close above 90 and 100 was hit many times. Also the drawdown was really reasonable as most held above 85. Here's some of the stocks looked at (tried to include sector diversity):

AZO
PCLN
MOS
POT
FLS
PTR
STRA
NFLX
CRM
BPT
GOLD
SI
AAPL
LZ
NEU
IBM

Stewie said...

Thanks for sharing these findings! Also, note that once a stock hits $100, it'll tend to run much higher: 110, 120, 130 etc etc.

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