In my recent survey a few people mentioned that they’d like me to review some of the charts that I post to see the results of my ‘picks’. I’ve never really done that for a few reasons:

  1. I know that some will be winners and some will be losers. I’m not one to break my arm patting myself on the back over a winning pick nor will I cry over a loser. The goal is to make money, not to be right. If I can be ‘right’ 50% of the time and still make money I’m cool with that.
  2. Actual results will often vary from the theoretical results based off of just looking at the charts. Things like you actual fill, if the stock gapped away from the ideal entry price, getting shaken out, etc. all play a part.
  3. The length of time one holds the stock can have a great impact on the results. If a long candidate went up 15% in a week and then dropped 40% was it a winner or a loser?

So anyway, by popular demand here’s a look at the charts I posted on September 22nd:

I always try to pick stocks that are ‘in sync’ with the major indices. So starting with the Nasdaq it was clearly due for a bounce after the close on the 22nd. The over-blown angst over hurricane Rita provided a great entry point just as the storm was being downgraded. And you can see that in the chart. The beautiful thing about Japanese candlestick charts is that they allow you to read the psychology of the crowd so easily. That hammer on the 22nd shows the extreme negativity early in the trading session and the fact that buyers (optimism) took over late in the day. So here’s the Nasdaq chart from the 22nd:

And here’s the current chart which shows a 1.94% gain in the Nasdaq since the 22nd:

Here’s the chart of Autodesk (ADSK) from the 22nd:

And the current ADSK chart showing a 12.6% gain:

Here’s AMT before:

And after its 6% gain:

Here’s aQuantive (AQNT) on the 22nd:

And the current AQNT chart after a choppy 2.44% gain:

Here’s Broadcom (BRCM) before:

And after a 6.13% gain:

FLSH before:

and FLSH after a 10% move higher:

OK, I’m getting bored with this. :-) Here’s the results from the other charts I posted that day:

  • I said GMR looked like a short and it’s now down 1%.
  • HAR finally got that pop and is up 4.23% to $102. I’ll be watching this one for a day trade early next week — I think $110 is calling it. :-)
  • SIRF is up 10.37% but looks like there were a couple of potential shake out points along the way.
  • TXN is up 3.57%, right back to the recent highs.

So there you have it. I hope you can understand why I chose these stocks. There’s no magic formula nor secret sauce here. My goal is simply to find low risk entries so that the losers will be small. I just read the market (Nasdaq) and tried to find some stocks that would go along for the ride. So for longs I like strong stocks that have pulled back to (or near) support (a trendline, moving average, Bollinger Band), have made some kind of reversal candle and are at or near oversold on the stochastic indicator. It’s just the opposite for shorts.