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Review of Recent MarketSmith Alerts
We are analyzing numerous breakout alerts triggered by MarketSmith over the past week, many of which continue to trend higher. Very often we will have an opportunity to enter on the same day as the alerts if we exercise a bit of patience. Use this video as a guide, what we call the “Trade of the Day Setup.”
Summary
We took several positions over this time period, putting money to work in setups that matched our criteria. MarketSmith allows you to customize your alerts to suit your style of trading. The default setting is a “breakout” above a pivot high.
THC – MarketSmith Alert
Tenet Healthcare (THC) triggered on May 01 @ 25.24 as price action rose above this pivot level on above-average volume. We shared our thoughts with members, during the LIVESTREAM broadcast, as we took an initial position using the ToD Setup. The stock was up 27% at Monday’s high, closing +26% by the end of the trading session. We are watching for a flag and volume to initiate another trade if it breaks above 32.00 (+/-).
MarketSmith Alerts – LGIH Earnings
We sold our swing position in LGIH prior to the company’s earnings announcement. LGIH beat by 0.33, and beat on revenues. It reaffirmed FY18 guidance.
We would like to re-enter as a post-earnings trade, but we will not chase it if it gaps higher. Wait for the opening range (9:30 AM ~ 10:00 AM), as it carves out a direction for the day. Use your Trade of the Day setup to monitor performance. If the stock holds the opening price action and starts to rise along with an ascending 9/20ema we will consider a trade. Buyers must show up, not sellers. The Trade of the Day setup explains the thought process.
Technically speaking, the stock formed a nice handle, completing the cup and marking a pivot breakout zone at 75.52. RS Line is rising, as we look for price to follow through today. EPS metrics are below price action +112%. We want to own stocks that have earnings and sales rising.
On the left side of the chart, notice 2018 estimates have ratcheted upward, as analysts increase their expectation to +31% for the year.
Futures are slightly lower as Iran news permeates the markets.
MarketSmith Alerts – Results for the Week
The first group is a few alerts that came out on Monday.
WDAY, RHT, GOOS and NOW have been on our watchlists over the past several weeks.
Previous Alerts
Look for follow-through similar to those noted during the LIVESTREAM broadcast last week, Monday through Friday. In my experience, many of these stocks are flagging and producing setups that will likely trade higher. This isn’t a guarantee of future performance, but rather an observation of what has happened in the recent past.
Note the 5th column from the left, the price at the trigger, followed by the current price on the right.
The last column is the type of customizable alert.
THC is line 59. Note, the trigger at 25.54 and current price of 31.74. We are all out of the initial trade looking for a new entry at this point.
In most cases, stocks are well above their trigger levels. Study each chart.
Join us at 9:20 AM for the LIVESTREAM broadcast. We’ll go over the Monday alerts during the market session.
Happy Trading,
Vinny
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