Download Proven Money Making Tactics

New York Investing Meetup
http://investing.meetup.com/21
Proven Money Making Tactics
Robert Rubin
February 21, 2007
Copyright 2007
All Rights Reserved
Buy Momentum Stocks With High
Short Interest
• Must meet three criteria –
– Above 200-day moving average for at least three months
– P/E > 50
– Short interest > 15% of float
• Short squeezes keep price rising
• Violates “fundamental” rules, but shorts lose by fighting
the market
• Use Big Charts (Big Reports - Stocks With Largest Short
Interest)
• BIG a good example
– Up 86% in last 8 months
– 20% short interest, P/E 52.7
Buy to Fill Gaps
• Must meet three criteria –
– Above 200-day moving average for at least three months
– Market cap at least $1B
– Price fell 5%+ in one day
• Probable over-reaction to negative news
– Make sure no crisis, scandal, etc.
•
•
•
•
Gaps up 5%+ work too, but less sure
Gaps tend to be filled over next few days/weeks
Use Big Charts (Big Reports – Stocks With Largest % Loss In Price)
CAT is an example:
– 10/19/06 close 69.02; 10/20/06 close 59 – a 14.5% loss
– 10/26/06 close 62.35 – a 5.7% gain since 10/20
– Caterpillar’s earnings shortfall temporary
Buy Splits
• Prices usually rise immediately after split
announcements
– Buy ASAP
– Get free split alerts by e-mail at
http://www.investmenthouse.com
– Check your broker’s site for intra-day announcements
• SSI an example:
– 01/08/07 close 19.75
– 01/09/07 announce 3 for 2 split at 6:00 AM
– 01/09/07 close 22.03 – an 11.5% gain
• Prices may drift further up – strong companies
Buy (or Sell) Stocks Bouncing Off
Their 200-Day Moving Average
• The 200-day moving average is a critical price
for both support and resistance
• Prices test the 200-day moving average and
often pull back, continuing their long-term trend
– May be the bottom of a price decline
– May be the top of a price rise
• Use http://www.stockfetcher.com/stockdb/fetcher
for $8.95 per month (150-day MA)
• Or look at stocks that cross their 200-day MA
and wait to see if they bounce back
• JNJ, UPS, WDC recent examples
Buy First-Time 52 Week Highs
Sell First-Time 52 Week Lows
• 52 week highs signal an up-trend, and 52 week
lows signal a down-trend
• Large profits follow the first 52 week high or low
• Use Big Charts (Big Reports – Stocks Hitting
New 52 Week Highs or Lows) and then check
the charts
• HMC is an example:
– 02/14/2007 close 40.78, a first-time 52 week high
– Look at two-year charts
Trade Short-Term Trend Reversals
• Must meet four criteria –
– Trading at or beyond upper or lower Bollinger Band
– W%R signals overbought or oversold
– One “trigger” day when opening and closing prices are similar,
and both are near the bottom (“tombstone doji”) or top
(“dragonfly doji”) of the day’s range
– One “confirmation” day when the range between opening and
closing prices includes that of the trigger day, and prices fall
(“engulfing bear”) or rise (“engulfing bull”)
•
•
•
•
Use candlestick charts to see “dojis” and “bears”
Use http://www.stockta.com to screen for dojis and bears
Stock or options for short-term profits
On 2/16, DRS near lower Bollinger Band, dragonfly doji,
oversold W%R – confirmation to follow?