My New Strategy

I've been wanting to try out the IBD data to look for trades but there are so many plays. I decided I was going to try some out on the CNBC challenge and on other trading simulation platforms.

Play #1: Stocks that are news to the 80/80 list or even the 90 tend to run up

I don't know how many plays I can find with this assumption, because from what I've seen stocks have already made somewhat of a run before they get on the list. The idea is that there are other funds using the IBD data and they'll reallocate their portfolio to these stronger stocks. I'll just have to add them to a watch list somewhere and keep watching.

Play #2: Stocks off the 80/80 list

Same idea, except the reverse. Funds will probably dump the stocks that moved off the 80/80 list, but chances are the stocks have already made a significant down move, therefore diminishing your risk/reward.

Play #3: Stocks with strong EPS or Fund Buying Rating dipped

This is the one that I'm trying out on CNBC this week. The idea is that there's a strong buying by other funds and there's the likelihood that they'll buy more of a stock that's retraced so the stock will bounce back. Some of the oil stocks have retraced but now the news just out that Saudi is going to increase production... I'll have to get it in the mornig early to see how oil is trading and maybe cancel some of my allocations to these oil stocks.

Here's my watch list:

Oil/Energy: SWN, OXY, CWEI, KWK, RRC, PQ, GLF
Coal: JRCC, PCX
China: XIN, EJ
Other: BAP, WBD, MTL, NCS, PAC, TNH, SDA

If oil is gapped down in the moring I'll probably dump these oil energy guys and I don't know how that might affect the two coal stocks I'm watching. I'm guessing it's going to have some negative effects. China hasn't been trading that well recently, maybe it's due for a bounce? All the other ones are pretty good I think. Like TNH, which is a top performing stock in a top sector selling fertilizers has been hammered pretty hard or SDA which produces steel and cement in Brazil is touching the bottom of that uptrend gives you a great entry and risk/reward.