No. of Recommendations: 9
Based on the "early exit polling", the race is too close to call (it's 9 to 7 in favor of a separate NJTA board as I post this). But I will tell you that I submitted a request last night to TMF to open a new board for NJTA.

I'm inclined at this point in time to go with a separate board for several reasons, but even if I do that, I still consider this experiment a combination of NJTA and NPI philosophies (because we used NPI technology stocks to generate our watch list).

One of the keys to NJTA is using Fundamental Analysis, business strategy analysis and "One Up on Wall Street" analysis to identify stocks that have the potential to become big winners over the long run. On the other hand, it is also important to have a a valid list of "short candidates" based on one's first hand observations of competitive threats, poor performance in the market place, poor customer service..... anything that you learn (or observe first hand) about a stock that you think could effect future earnings in a negative manner.

I had a hard time getting much negative input on potential "short" stocks, so we'll just use one list and see if the shorts rear their ugly head. An ideal short candidate would be a stock that has been above it's 50 d EMA for a couple of months or longer suddenly dropping more than 3% below it's 50 dEMA on volume of 140% of ADV, having a negative MACD and a lower RSI over the past month or two. All these conditions must occur simultaneously (the same day). If we see any of those situations, we will short.

Conversely, our long entry positions will require the stock to be increasing in price to at least 3% over the 50 dEMA, have a positive MACD, volume 140% of ADV, and a rising RSI over the past month or so.

When I purchase (or when I short), I will tell you at that point in time what the stop loss level is and also what the next level is that we will add to our position (i.e., we will be averaging up if one of our long positions is climbing, but we will have predetermined points of where to add and I will tell you this at the time of purchase).

One other point I need to make is that I make purchases intraday even though the volume may not be 140% of the ADV yet. If in the first hour or two trading, all the conditions are met except the ADV being 140% of volume, I will go ahead and pull then trigger if it appears the 140% of ADV will be met by the end of the day. For example, let's say a stock normally trades 1,000,000 shares per day, that would mean that it would have to trade 1,400,000 to meet NJTA criteria to purchase. Let's say in the first hour of trading it trades 600,000 - 700,000 shares then I will assume that by the end of the day the 140% criteria will be met and I will buy or short as appropriate (if the other criteria are met).

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.