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New ideas/ what I’m like

August 27, 2012

27 August

I returned from holiday intending to move on to the next stage of marketing myself: finding suitable funds to contact. However, I found myself wanting to catch up with the market. I want to continue with ongoing coverage of previous recommendations and add a few new ones, although less time must be spent on that. Two weeks later (Monday each week), I’m still looking at trade ideas not contact lists.

That’s a good example of what I am like. I’m far happier getting stuck into my analysis than networking and contacting people. Anyone employing me will need to understand that to get the best out of me, they should let me focus on the analysis.

Anyway, here are the other trade ideas I have found.

Moving average crossover method trade ideas

Long utilities, short auto retail

In my methods, I say that averages should not have crossed for at least two years, preferably four years. Getting four years without a cross is quite hard, but there is enough commonality in these pairs across the utility stocks to suggest that a long term rotation in favour of utilities, away from auto retailers is taking place. Remember that these are long term rotations and not exactly timed entry points.

  • These pairs were set up with a 12 and 26 week moving average
  • Many show bullish crossovers, following bullish divergences on the MACD indicator

Use the following stocks on the long side:

Edison Intl (EIX)
Entergy Corp (ETR)
Exelon Corp (EXC)
Nextera Energy (NEE)
PG & E Corp (PCG)
Public Service Enterprise (PEG)

Use these stocks on the short side:

Autozone (AZO)
O’Reilly Automotive (ORLY)

Bollinger Band contraction idea

The pair of Goldman Sachs (GS) v iShares Brazil (EWZ) is setting up according to my Bollinger Band criteria.

Gs_rel_ewz_weekly

  • The ratio formed a base in late 2011, rallied and has consolidated since late March
  • This consolidation has allowed the 25 week Bollinger bands to contract to their tightest in three years
  • The 25 week moving average has turned higher
  • The ratio has now broken above the upper band and you should look to be going long GS, short EWZ
  • The entry criteria includes an expansion of the bands, which has not yet occurred
  • Watch this week for an expansion of the band as an entry signal, along with the ratio continuing to make upside progress. Today, the ratio is up by around 1.7%, so that is a good start

 

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