OK in this kind of markets it’s best so take a step back, and try to figure out strategies that could work out for you. Last night I drafted up a list of about 25 companies from around the world, that are either “best of breed” stocks, or the major cap players in the bigger exchanges.
I’ve also configured them nicely into a new CMC layout, while also watching the Nikkei, Hang Seng, FTSE, S&P; and DAX. I’ve really got to start focusing on what the major indices are doing, as well as the more important commodities such as Oil, Metals and Wheat.
I will be paper testing my new strategy today and tomorrow, to see if it covers different sectors and indices on different days.
The list of companies:
AT&T;, BHP Billiton (AU), Bank of America, General Electric, Microsoft, Siemens (DE), Monsanto, GSK (UK), Vodafone (UK), PetroChina, Exxon, Gazprom (RU), Proctor & Gamble, Electricite de France (FR), Google, Petroleo Brasil (BRA), Cisco Systems, US Steel, Toyota (JP), Nokia (FL), Total (FR), Transocean and Citigroup.
My strategy for the rest of the week is pattern and indicator plays based on the 30 and 15 minute charts, depending on volatility. I will also choose a stock I have previously mentioned, and use technical analysis on the 5 minute chart.
My decision is based mostly on the fact that I believe scalping is the best way to profit from the current market.
Trades thus far today:
Total (FP) – FR
Started watching this when the 50.3 support was forming. It was a clear wedge, and I was initially bullish when I looked at the divergence on the MACD. However, on the same low the MACD stayed the same, unlike it had done preceding this.
I took a short just as the price moved out of the wedge, and I later covered on a return of the divergence and a double bottom. While not hugely profitable, it was a confidence booster. I should have closed and reversed.
Barrat Developments (BDEV) – UK
BDEV had formed the cup and part of the handle by the time I started tracking this. Gaps are always supposed to be filled, and this filled nicely as it bounced off the gap price. This ultra-long and tight wedge that followed indicated that the stock was ready to breakout nicely, and this cup and handle formation is a nice pattern to have in the arsenal.
It was quite protracted, however it broke quietly and I immediately took a position at 60.25. My initial price target was 65-66 – and I decided to trail a stop at the previous bars close. After this I expected a retracement to 60, or the 50MA which has been looking good in this timeframe.
My trailing stop was triggered at 64, after a rally-high at 64.74 which represents a 6% return. I’m pleased with how that turned out and I will use that setup again.
Vodafone (VOD) – UK
This trade isn’t currently quite working out as expected. The 250MA is providing good support/resistance on the 15 minute chart, and I predicted that it would bounce off this – and it did briefly by a few pence.
Since this screenshot it has dropped to 153.28 and off the 250MA. This would normally be a sell signal, but some leeway has to be given with MAs, and also the current volatility in this market as this could easily be a fake out. Drops off 153 clean are a better sell signal in this timeframe.