Post on 16-Jan-2015
description
Great Summer Stock PlaysFinding Short-Term Performers with Chaikin
Analytics
Rachel Fox - creator FoxOnStocks.com
Eric Chaikin - Chaikin Analytics
June 24, 2014© 2014 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.
Welcome
Chaikin Analytics for Desktop2
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What We’ll Cover
(Intros…)
1.What is the Chaikin approach?
2. How do I use Chaikin to find winning trades?
3.Specific Buy and Sell Patterns
4.Special Offer & Opportunity
5.Q&A3
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Challenge: Information Overload
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Solution
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The Solution: Chaikin Analytics
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Chaikin Power GaugeClear summary of a stock's potential – with a record of success
• Financials
• Earnings
• Technicals
• Experts
Improves your trading batting average!
© 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.
Chaikin Power GaugeClear summary of a stock's potential – with a record of success
• Financials
• Earnings
• Technicals
• Experts
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©© 20132013 ChaikinChaikin AnalyticsAnalytics LLC.LLC. AllAll RightsRights Reserved.Reserved. PrProprietaryoprietary andand Confidential.Confidential.
What is the Chaikin Power Gauge?
• Very Bullish-to-Very Bearish rating
• Indicates likely relative performance over 1-to-6 months
• 20-factor quantitative model looks at:
Financials, Earnings, Technicals, Experts
• Covers 5,000 U.S. equities
• 12 years backtesting, 3 years real-world performance
© 2014 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.
A reliable indication of a stock’s potential, with a history of success
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Power Gauge PerformanceRussell 3000 - Large, Mid, & Small Cap stocks
Annualized return by Rating group vs. benchmarks. Note: Test results are equal weighted; R3000 and SPDR ETF are cap-weighted.
Very Bullish stocks are highly likely to outperform index benchmarks.
Results thru Q1 2014
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Period Dates Very Bullish stocks
Russell 3000ETF
SP500SPDR ETF
All Real-World Performance
Jan ’11 -Mar ‘14
+20.70%annual return
14.99% 15.01%
Last 12 Months Apr ‘13 -Mar ‘14
+34.29%annual return
22.93% 22.21%
Year 2013 Jan ‘13 -Dec ‘13
+49.59%annual return
32.83% 32.13%
Life-To-Date(includes test period)
Jan ‘99 -Mar ‘14
+22.28%annual return
5.07% 4.64%
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Play Offense Well: What to buy
• Power Gauge Rating Bullish
• Price Trend Up
• Relative Performance Strong
• Chaikin Money Flow Strong
• Buy Signal in Chaikin Analytics
What to Buy: Classic Bulls
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Play Good DefenseTurn Land Mines into Gold
Mines
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• Power Gauge Rating Bearish
• Price Trend Down
• Relative Performance Weak
• Chaikin Money Flow Weak
• Sell Signal in Chaikin Analytics
What to Sell: Classic Bears
Why I Love Chaikin Analytics
• Can be added to any trading process
• IS the missing puzzle piece of confirma: on
• Fits all styles: Growth, Value, Momentum, Long Term, Short Term
• Fits all levels: Beginners, Intermediates, Pro Traders
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Rachel’s 4-Step Process
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1. Find Strong Stocks in Strong Groups
2. Confirm Fundamentals & Technicals
3. Find the Carrots! (Buy/Sell Signals)
4. Identify Technical Patterns
My Process: Step 1
• Find heavily saturated industries:
Highly bullish
• Select based on likely market direc: on over next (1 2‐ weeks)
Highly bearish
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Loop through:
Very Bullish stocks in strong industries (Longs)
& Very Bearish stocks in weak industries
(Shorts):
Do the fundamentals confirm the technical trends?
• Chaikin Analytics - great for finding strong fundamentals;
it incorporates predictive factors:
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• Analyst Estimate Revisions, Short Interest, Insider Activity
• Confirm Chart Technicals:• Strong Chaikin Money Flow (accumulation), Strong Relative Strength, OB/OS
My Process - Step 2
My Process: Step 3
• Find the CARROT
• Of “Very Bullish” or “Very Bearish” stocks find Buy/ Sell signals
That’s the Buy/Sell TODAY indicator. Gives me lower risk entry/exit point.
• Tells me when something it hot and ready to pop.• Perfect for the short term.
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Step 3: Buy/Sell Signals
Focus on 2 types:1. Overbought/Oversold Buys & Sells2. Relative Strength Buys & Sells
Overbought Sell – Finds Bearish stocks which are overextended
rela: ve to their recent short‐term trading range.
Oversold Buy – Finds Bullish stocks which have become Oversold rela: ve to their short‐term trading range.
Rela<ve Strength Sell – Measures the stock’s performance rela: ve to the market as a whole. If the price has a risen but not as much as market, Chaikin will give a sell signal.
Rela<ve Strength Buy ‐ Measures the stocks price rela: ve to the market as a whole. If the price has fallen but not as much as market, Chaikin will give a buy signal
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Step 4: Identify Patterns
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Technical Patterns1. Consolidations2. Reversals3. Continuations
Look for these in another intraday trading system ‐ complementary to Chaikin
If the stock has been bullish for a while & Chaikin’s system shows there is a buying signal BUT there is a technical consolida: on pa\ ern forming, I’ll wait to see if the stocks next technical pa\ ern breaks higher or lower.
Consolidations
Channel
Symmetrical Triangle
Ascending Triangle Descending Triangle
• If the stock breaks lower out of a consolida: on pa\ ern, my guess would be that a reversal pa\ ern is forming and I would NOT buy the stock. 2
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Reversals
Double Top
Double Bottom
Multiple Top
Multiple Bottom
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Head & Shoulders© 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.
Continuations
Bullish Pennant
Bullish Flag
Bearish Pennant
Bearish Flag
Wedge
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Confidential.
• If the Consolida: on pa\ ern breaks higher, then my guess would be a Con: nua: on pa\ ern is coming next. If I get confirma: on of a Con: nua: on pa\ ern, I’ll move forward and buy the stock.
Chaikin Analytics Demo
Let’s look at the system 2
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Trades I Made with Chaikin
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Confidential.
EL - Estee Lauder 3/11
(short) SGMA Sigma - 3/13
(long) CKH- Seacor 3/13
(short)
N - NetSuite 4/3 (short) - also just shorted it today!
TFM - The Fresh Market 3/14 (short)
HII - Huntington Int’l - 3/20 (long) - “personality change”
TTM - Tata Motors - 4/30 (long)