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chk999longonly (97.74)

First Proposed Strategy Tweek

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January 04, 2008 – Comments (3)

I can already see one change that would make this strategy better and that is to wait until a stock stopped making new 52 week lows. Currently I scan the the 52 week low list at barchart.com by hand to look for candidates. I grab things that look good as soon as they show up. Since stocks usually make new lows for a while, I'm catching falling knives.

It will take some automation to find stuff that stopped making new lows. I have some ideas on how to do this (I write software for a living) but I just have to find time to bend some code.

There are a lot of good companies hitting 52 week lows right now. The semiconductor industry seems to be being punished very heavily. I think there are some bargains out there right now. If I find something truly lucious, I will post about it in this blog. (After I have bought out my position, I'm not nuts.) 

3 Comments – Post Your Own

#1) On January 04, 2008 at 2:08 PM, MakeItSeven (31.68) wrote:

If you have an account with stockcharts.com it would be trivial to screen for stocks which move off their recent 52-week low..  [BTW, if you do any TA then it's worth it to have an account with stockcharts.  I would have no idea how to invest without it.]

Another thing to avoid catching the falling knife is that you might want to wait until the stock creates a base for a little while, preferably months but at least weeks.   Otherwise, you will get a lot of dead cat bounces.

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#2) On January 04, 2008 at 2:38 PM, StockSpreadsheet (68.47) wrote:

You could also look at a moving averages chart.  If the daily stock price is moving lower and the 10-day is moving lower, put the stock on a watch list and check back in a week.  Once the 10-day stops moving lower, the stock might have bottomed.  You can look at a longer average, (20-days or 50-days), to see if it has stopped moving lower.  If the 10-day moves up and the 20-day has stopped moving down, you have probably seen the bottom, at least for a while.  This method won't let you find the absolute bottom, (since it would have to have passed it for the chart to start moving back up), but it should help you avoid falling knives.  Don't know what a subscription to Stockcharts costs, but you can get moving averages data for free from Yahoo!.

Just another possible tool.  Good luck with your investing.  May all your picks be winners.

Craig 

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#3) On January 04, 2008 at 2:48 PM, MakeItSeven (31.68) wrote:

Craig,

You can screen for the conditions of any MAs with stockcharts too so there's no need to do anything manually. 

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