Daily Reports
Mon
Trades:
Napco Security Technologies, NSSC – Buy 132 @ $47.45 (£4,970).
Broke through 3 month old resistance line with 80% more than usual volume. RSI positive, MA in up trend & broken into new ATH. Sub-sector in up trend. Yellow earnings. Could be argued it’s coming from a phase 1 set up, though the drop was very quick with a very fast recovery. As such I’m treating it as a continuation move and targeting a 25% profit. Checklist score on purchase 44.
Earnings results:
KNOS – Decent results, though no way near on checklist score.
Tue
Trades:
No trades, though POWL did break through on high volume. I didn’t see it until Wednesday morning as was playing golf in evening. It shot up 14% on the day and I’m not confident of a stop less than 10% away. It is a very volatile stock with the average daily move around 4% and 10% plus moves not uncommon, so feel there’s a high chance of getting stopped out very quickly. It’s also quite a short sideways move of only two months. I may regret it but I’m not feeling it, so not taking the trade a day later. If I had caught it as it broke through it would have been a much better entry. It was a break out of a sloping trend line & there is a horizontal resistance not far away. If it breaks through that with volume there is another entry opportunity.
Also ONON was set up for a buy & I actually went on to AJ Bell to purchase, but it wasn’t on there. May need to set up another platform so I have more coverage.
Wed
Earnings results:
NVDA – Stunning results, a beat on expectations again and improved guidance. Looks like it will break through resistance at the open, will add to position. Scores a perfect 50 on checklist.
ELF – Not so great results with negative EPS growth & reduced forward guidance. No longer passes checklist, though will keep an eye on as I like the company & believe the stock is very likely to have another strong run.
SNPS – Had a quick look through, not impressive. Growing, but not very much. Only a 24 cecklist score.
Any major news:
UK inflation data – Actual: 2.3% Forecast: 2.1% Previous: 3.2% Going in the right direction, though higher than expectations. May mean no interest rate cut this summer as some had expected. UK markets down as a result.
Thur
Trades:
NVDA – Buy 3 @ $1,019 (£2,424) – bought at the open based on excellent earnings and breaking through resistance level. A top up buy to bring up to a full position, as initial entry back in January was fairly small. I am conscious that as good as results were earnings are starting to decline, so will need to keep a close eye on it and may be a bit more aggressive with my stop.
Earnings results:
AJB – Strong results, beating expectations. I think FY figures will be upgraded. Not going to add, just sit on position until I get stopped out. Nothing to dislike here. Hargreaves Lansdown received a bid offer, which they rejected as too low. But has boosted their share price, maybe some residual move for AJB as well. AJB scores 36, though with upgrades that will go up.
DECK – Very solid results, beating expectations. Decelerating growth into next quarter, though still above 20%. Scores 48 on checklist, a big upgrade from previous quarter. Ready to buy if it breaks through resistance.
Any major news:
UK General Election announced for 4th July, sooner than expected. Not sure if this has any effect on the market, but the election itself certainly will.
Fri
Trades:
Deckers Outdoor, DECK – Buy 5 @ $1,009 (£3,993).
Excellent results yesterday after close, gapped up today through resistance after a couple of months of sideways action. Bought at open so wasn’t sure of volume, but very confident. RSI positive, MA in up trend, sub sector (retail) in up trend & breaking to new ATH. It is a continuation of an 18 month move, so definitely a trade rather than investment. Targeting 25% at $1,265. Checklist score on purchase 48. Only bought £4k rather than £5k as the market was a bit uncertain yesterday & I have a fair few new positions, so just limiting risk slightly.
Weekly Wrap
Trades made
Napco Security Technologies, NSSC – Buy 132 @ $47.45 (£4,970).
NVDA – Buy 3 @ $1,019 (£2,424)
Deckers Outdoor, DECK – Buy 5 @ $1,009 (£3,993).
Total positions now 19. Eight UK & eleven US.
Best themes / subsectors & general market feel.
There was a bit of uncertainty in the US indices this week, though there was a strong finish to the week which I think may continue into next week. The weakness was likely a bit of hesitation going in to NVDA earnings, as that stock is strong support for the whole market at the moment. As well as some people selling up ahead of the holiday weekend.
The UK markets were mixed, decline in the FTSE 100 & All Share, but growth in the AIM index, so smaller cap stocks. AIM has seen a definite breakout of it’s almost three year down trend, which is great to see. More takeovers this week, including an offer for KWS, a stock I’ve been following for a while. It’s a shame I think, too many high quality companies are leaving, when the UK is struggling as it is. There’s certainly far less stocks passing my checklist in the UK than there is in the US.
No major changes in the direction of sub sectors, though some of the recent strongest ones have been going sideways for the past month or so, certain tech & healthcare ones etc. Some alternative energy themes are showing good strength like wind & solar. Neither in a definitive up trend yet, though probably worth looking at some stocks in these areas as I currently have none on the watchlist.
Thoughts on strategy, anything else
I’m pleased with my entries this week. All were great set ups and instantly profitable, time will tell if they remain that way but the entries were solid.
As I recently updated my screening process, a few of the stocks I’m holding no longer pass my checklist. I’ve been thinking whether to sell them because of this, or simply let them run with the usual process. I think I’m leaning towards the latter, though if I need to sell any to make way for new stocks these will get cut, starting with the ones that look the weakest. These stocks include:
US – CROX, REGN, RMD
UK – BOWL, KEYS, IPX, BVXP, FNX & GAMA
Though still too early to tell how successful it will be, I feel good about the changes I’ve made to the system. All parts of the process feel connected, whereas before my entry system was a little disjointed from the deep dive fundamental research, which was more aligned with value investing.
Looking to next week
Stocks setting up the best
UK:
ELIX – close to breaking out of base and starting phase 2 uptrend.
JNEO – could break out of bull flag for a continuation of phase 2 uptrend.
SOLI, SUP & GMR – All broke through recently (before they were on my watchlist) with volume & have all pulled back. Be careful with these, but consider entry if one pushes past previous high with volume.
US:
SHOO – 5 months sideways action, trending towards upper level for phase 2 continuation.
BRBR – 2 months sideways action, trending towards upper level for phase 2 continuation.
CELH – Very close to putting in new ATH, quite extended from the MA so would have to be very high volume. Like the stock though.
POWL – missed this entry last week, very volatile stock. If it pulls back and breaks upper resistance again with high volume then enter. Need to time well though to get a good stop.
ISRG – knocking on upper level, actually thought this would go last week. It has pushed through resistance but on low volume so didn’t enter. Enter if volume comes.
MEDP – Tight sideways action, simple entry if it breaks with volume.
LRCX – 2 months sideways action, trending towards upper level for phase 2 continuation.
Upcoming earnings
UK – SUP
USA – ULTA, VEEV
Upcoming major news events
Monday – UK & US Holiday
Thursday – US GDP
Friday – US PCE price index YOY
Game plan
Continuation of new strategy. Up to 19 stocks now so if entries arrive will need to start cutting some holdings. Plenty of ones that don’t pass the checklist to choose from. Wait for great set ups, there’s plenty of opportunities around at the moment, no need to jump on every one if there are better options. Though having said that also have conviction in the strategy, if there is a great set up, go for it with a full position, don’t hesitate. Worst case scenario is a 0.5% total loss.