Check Out Stephen R Stewarts Public Chart List

I need to set the record straight.  Two previous stocks I mentioned here at BestOnlineTrades, TA Travel Centers of America and NCT NewCastle Investment Corp were originally identifed by a man named Stephen R Stewart.

I forget how I found his chart list but you can see his listing of charts over at his public chart list on stockcharts.com

He has some outstanding chart work not only on indices but also on a handful of individual stocks and I can say I learned a few things from looking at this chart work.  I learned to respect the power of momentum trading.  He recommends looking and focusing on the WEEKLY charts of various stocks to get a clearer picture of trend strength and momentum.  He has several stocks where he shows how a weekly RSI moving above the 70 line is a very bullish momentum signal that can lead to good momo type runs in many different types of stocks.

He has highlighted many cheap stocks that fall into this category but I supposed it ought to work just as well in higher priced stocks. 

The momentum strategy in my opinion is a very good strategy for finding trade setups for the simple reason that you are going with the tide, not against it and you already have the knowledge that the bulls are fully in control and that is likely to continue.

However I would say that momentum probably only works best when you have a cooperating primary trend bull market.  For example I do not believe there were too many momentum stock setups during the period late 2007 to late 2008.  That was the most severe bear market in 100 years.  I really doubt there were lots of momo plays at that time.

However, now there are plenty of them because we have been rocketing up almost in a straight line since the March lows.  The big caps and high earning type stocks have moved first and the fastest.  But now we are also seeing ‘junk stocks’ as Stephen likes to refer to them, move up as well.

So play the momo as long as the primary trend is still good.  But be careful and tighten risk management when you see a change in primary trend.

If you visit his public chart list, be sure to vote for it all the way at the bottom right hand side of each page.

By the way the NCT stock that I mentioned before is still drifting a bit but had a nice increase in upside volume today.  I still think it wants to complete a small right shoulder and then get a breakout type move going, hopefully as soon as the end of this week.

Posted in Market Timing, Technical Analysis
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