On Friday morning (9.42am UK time, 4.42am ET, 1.42 PT) I tweeted about SSYS being a good reversal opportunity. Members of my filtering tools would instantly recognise a great railroad track setup.
I filter for railroad track setups every day, and this one was particularly attractive because it was a bearish opportunity in the context of a downtrend and with a negative 5-day OVI average. Another decent RRT yesterday was X, though not with the OVI setup. Remember, typically we don’t get the luxury of reversal setups with the OVI, but when we do, it’s worth paying attention.
Furthermore, this was in the context of a red OVI Sentiment, where reversals are more the order of the day; and we’re in earnings season, which also makes us more discerning with trend breakout trading.
Both stocks reversed nicely, but focusing on SSYS, it reversed $2.46 by the close, with no drawdown … an excellent return. The back story is of analysts downgrades, but the setup was as clear as day for us. The context of this suggested a very high probability of a downward reversal, which promptly manifested beautifully.
Now, back to the Twitter thing! If you have a smartphone or the ability to be on Twitter please do use it, please do follow me @GuyKCohen and have the alerts to ping you when I tweet. I’m not a manic over-tweeter, but there are times where it’s a great way to get a quick message out, particularly during times where I cannot send more than one email on a given day, or when I’m on a mobile device myself.
While my regular video commentaries do typically give a heads-up on specific stock setups, there are times where I have to use a different medium to make a quick communication. Also, if you have my tools they’re specifically designed to be used quickly – by me in particular!
With RRTs there are typically only a handful that show up in any case, and of those it’s very easy to weed out the unsuitables like penny stocks and stocks with tight ranges.
Yesterday there were eight RRTs in total, and you would instantly see that only two were attractive, SSYS and X. Realistically, that took just a minute or so to filter and review.
In summary, of course I’ll continue to send out the video blogs in the same way, sometimes there’s a lot to say, sometimes not so much. During earnings season they calm down somewhat, but this will change as we start to play specific pre- and post-earnings strategies very soon.
As for the markets, my previous comments remain … it’s more of a monitoring situation right now, with the odd plum that will appear (like SSYS!).
Next week we have IBM, MS, YHOO, VZ, BA, MCD, FB, EBAY, CAT, AMZN, GOOG, HAL, UA, CMG, ABT, EMC, HP, SBUX, UAL, LUV, AAL reporting, so it’s an important few days ahead.
Finally, if you haven’t downloaded my options eBook “Options for Earnings and Income“, please do now. It’s over 200 pages and is a must for anyone interested in options.
Here’s the eBook link.
All the best
