Hank Swiencinski, AIQ TradingExpert Pro client fro over 20 years, founder of
‘The Professor’s One Minute Guide to Stock Management’. Later this month Hank
will be presenting an AIQ webinar covering some of the techniques he teaches,
like cycles and
stick patterns. Hank will be presenting this free AIQ webinar entitled The Professor’s One Minute Guide: The
Basics, January 24th, 2013, 4:30 – 5:15pm eastern,
on this link to register. Here’s a sample of his analysis
The Dow rose 17 points on Friday, closing at 13,488. It was up 53 points on the week. The Nasdaq was up 3 points on Friday and up 23 points on the week. The rally continues.
The Dean’s List remains strong, and all of the cockpit indicators remain positive.
Big Picture Strategy: I’m Bullish and will remain so until the Dean’s List starts to weaken. I’m expecting the ride to end near the 14,000 level, possibly higher. When the ride ends this time, it will be time to change the strategy. Not now.
CNI was up 0.75 points on Friday, closing at 94.25. It reached a high of 94.65 during the day. Earlier in the week, I mentioned that the first target for CNI was ‘just under 95’, so we got very close. My next target is 97, then 105. The reason I’m focusing on CNI today is because I want you to have an idea about what to expect next. CNI is currently in a trend mode. It has moved higher as a result of the Band squeeze….just like we expected. Money Flow remains strong, pushing prices higher.
If you bought CNI after it was highlighted by Emeritus and placed on the Honor Roll, you’re probably up close to 3 points now. And 3 points times 300 shares is $900, a nice profit. I bet that many of you are starting to get antsy, thinking it might be time to take some money off the table. Hmmm? So what are you going to do with your CNI?
Are you going to hang on for the higher prices projected by the smaller Hockey Stick pattern? Or are you going to wait to see if CNI reaches the projected target of 105 suggested by the larger Hockey Stick pattern? What to do, what to do???
I mention this today because this question comes up all the time. And it’s important that you think about what to do in situations like this.
Here’s the deal: Remember last summer, when we were having fun with Royal Gold? Remember how we saw a Hockey Stick pattern form between May and August, and how we saw the Bands start to narrow? If you don’t remember, I suggest that you take a quick look at Royal’s chart. Remember too how we measured the stick, and made projections to the 94-96 level? We did this when the stock was trading in the mid-70s.
OK, now I want you to think back and remember how you felt when the stock started to advance. It was pretty cool, wasn’t it? I remember all the emails I received when the stock hit 85. Many of you were starting to get nervous. You had 10 points of profit.
But the pattern said Royal still had another 10 points to go…at least. A lot of you sold at 85. But then a few days later, many of you were wondering why you sold. The indicators were still positive. Remember my story about checking the roots? You planted the seeds, you gave the plant plenty of fertilizer and water, but as soon as the plant started to shows signs of blooming, you sold. You had to check the roots even though the flower was telling you that it was OK. Hmmm?
No. In the Professor’s Methodology, we don’t check the roots! We let the plants grow to become flowers. We only sell IF there is something obviously wrong with the plant. Then we might do a little pruning. There needs to be a reason.
So now after reading this, and looking at how Royal Gold went on to move 5 points ABOVE its target, reaching the 100 level….now I want you to take a closer look at CNI.
Is the stock doing what you expected? Is it healthy? Do we need to check the roots?
Now I want you to go back and look at Royal again. But now I want you to take a close look at the stock on 10 October. That’s when both the DMI and P-vol turned negative. Hmmm? That was the time to check the roots. The stock closed at 95.26 that day. Two months later, on 20 December, the stock hit a low of 76.17.
So let me see if any of this hits home? You spend all sorts of time doing research on a stock, and then finally get the nerve to pull the trigger. But then as soon as it starts to move up, doing exactly what you expected it to do, you sell. Hmmm? Or if you did have the discipline to hang on until the stock reached its projected target, you failed to sell when the indicators told you the move was over. And for the past 3 months you’ve either given back all your profit or worse…are now experiencing a loss.
So now go take another look at the chart of CNI. Then think about Royal Gold. Knowing what to do and having the discipline to do it is what trading is all about.
Have a great weekend.
That’s what I’m doing.
BTW, several gold and silver stocks have re-appeared on the Dean’s List. Royal Gold was among them. So once again, we have DL and Pattern. And 2 of the 3 PT indicators are now positive, at a time when the Bands have really tightened. What to do, what to do?
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.