Over the weekend I compiled the May 2009 watchlist. This is the first watchlist of my trading strategy and I couldn’t have picked a better time to begin.
The trading plan clearly defines the criteria for making the monthly watchlist. To recap and save you the time of rereading the plan, an investment must meet the following criteria:
Beta is greater than or equal to 2.0
Average daily volume (10-day period) is greater than or equal to 500,000.
Price is greater than $5 per share.
The criteria is sorted by Beta descending, so the highest Beta stocks are first. The top 50 stocks are tracked.
Well, there were over 150 eligible stocks, so I reduced it down to the 50 with the highest Beta coefficient. I spent several hours looking at the monthly, remember long-term, and daily (short-term) charts. The great part is my timing. All of the stocks are currently in robust bullish trends.
That being said, the challenge now is the sit-and-wait game. I would love to jump in to some of the stocks now and try to capture the last couple points. But I must remain disciplined. Its been very painful, though. Many of the the stocks have been skyrocketing in just the last two days, not to mention from their entry points (most back in March, not surprisingly).
I can sit on the sidelines knowing that there will be future opportunities.
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I am an amateur trader and investor with over 15 years experience in the stock market. I was bred to be a fundamentalist and followed fundamental analysis until 2009. Following the 2007-2008 bear market, I began to shift from a buy-and-hold strategy to trend-following techniques.