A Couple of Buy Signals – 1/14/14

I have been working on creating trading systems on a few stocks that I plan to trade over and over again. The list is a modest list of stocks. They are not high flying stuff; but a nice diverse group that most people would recognize. Key is whether the trading systems show acceptable results in the past through the various gyrations of the market.

The process I followed is to pick some stocks from my various folders and then backtest 33 different trading systems over a 8 year period using daily data. Then I analyzed the results and paid attention to which of my favorite trend following systems worked well on these stocks. Next I looked at more rapid trading systems and saw which ones either generated high favorable trades or which lost the most money. Taking the inverse of those high loss systems means I have a good profitable system. I have to shed my comfort zone at that point as the markets act illogical at times… following logic is not always profitable… in fact most of the time it is less profitable than doing the illogical. My favorite method is to combine a nice trend following system with an illogical contrarian system and then trade in the direction of the trend… kind of like buying dips in the direction of an up trend.

So here is this list of stocks I am using…

AES  ATMI   CL   F  GD  HOG  HOV  HRS  KO  NAV  NUGT  PFE  RFMD  SNDK  SU  TAN  X  YHOO

I am closing a winning trade on GD tomorrow and entering trades at market open on F and TAN. I will take a small position on F because I would prefer MACT (Blue and Red lines) to be moving up instead of down. Here are charts on GD, F and TAN…