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How to build and maintain an actionable watch list

How to build and maintain an actionable watch list. Blaine Phipps 20 Febuary 2014. Key to Success. How can you find these opportunities?. It all starts with having a watch list and game plan ahead of time

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How to build and maintain an actionable watch list

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  1. How to build and maintain an actionable watch list Blaine Phipps 20 Febuary 2014

  2. Key to Success

  3. How can you find these opportunities? • It all starts with having a watch list and game plan ahead of time • It is import to always maintain a current watch! No matter what state the market is in. • It is especially important during times when the market is in a “Downtrend” • You need to know which stocks are strongest and ready to breakout when the market goes into a “Confirmed Uptrend” • During “Confirmed Uptrends” you need to be ready for stocks that are about to breakout • Use the following 5 steps to help you catch the next round of big winners

  4. Step 1: Make 2 watch lists • List 1: Near Buy Point • For stocks near a potential buy point right now • List 2: Radar Screen • For stocks with traits you look for, buy not currently near a buy point • You want them on your “radar screen” if they offer buying opportunity later

  5. Step 2: Limit the number of stocks you’ll put on each list • Your watch list must be actionable • If you have too many stocks, you won’t be able to watch them and act at the right time • What’s the maximum number you should have on your lists? • Depends on how much time you have to do research • If you only have a few minutes each day, plus time on weekends: • “Near Buy Point” list: 5 – 10 stocks • “Radar Screen” list: 10 – 15 stocks • Be Selective! • Focus on true market and industry leaders • Superior sales & earnings growth • Strong return on equity • Other CAN SLIM traits (see buying checklist document)

  6. Step 2: Limit the number of stocks you’ll put on each list • Get to know the stocks on your lists • Use IBD Stock Checkup on Investors.com to learn more about the stocks on your lists • At the top you will find a short description of what the company does

  7. Step 2: Limit the number of stocks you’ll put on each list • Get to know the stocks on your lists (cont.) • See how the stock ranks among it peers

  8. Step 2: Limit the number of stocks you’ll put on each list • Get to know the stocks on your lists (cont.) • Check out the stocks CAN SLIM ratings

  9. Step 2: Limit the number of stocks you’ll put on each list • Get to know the stocks on your lists (cont.) • Read some articles about the stock

  10. Step 3: Use IBD screens & articles to find stocks to add to your watch list • Weekly Routine (Scan IBD 50 & Your Weekly Review)

  11. Step 3: Use IBD screens & articles to find stocks to add to your watch list • Market Pulse in the Big Picture (Daily in the B section)

  12. Step 3: Use IBD screens & articles to find stocks to add to your watch list • Stock Spotlight (Daily in B section)

  13. Step 3: Use IBD screens & articles to find stocks to add to your watch list • Sector Leaders (Daily in B section)

  14. Step 3: Use IBD screens & articles to find stocks to add to your watch list • IPO Leaders (Tuesday & Thursday in B section)

  15. Step 3: Use IBD screens & articles to find stocks to add to your watch list • New High List Analysis (Daily in B Section)

  16. Step 4: Make a specific game plan for stocks on your “Near Buy Point” list • What is the potential buy point? • Is overall market in confirmed uptrend? • How much volume do you need to have a confirmed buy • How many shares will you buy if the stock breaks out on heavy volume? • What is your stop price? • Maximum of 7 – 8 percent of your buy point • May be less if you can identify a logical point of support • Answer these questions ahead of time! Be ready to take action without hesitation.

  17. Step 5: Regularly update your watch list • Make it part of your weekly routine • If a stock on your “Near Buy Point” list breaks out or breaks down, remove it • If you don’t regularly weed your list, it can quickly become a junk drawer • If you reach the maximum number of stocks on your list, take off the weakest stock before adding a new and better one

  18. Monitor the stocks in your “Near Buy Point List” and be ready to act • Watch to see if the stocks in your list breakout in the coming days and weeks • On a breakout, look for volume at least 40-50% higher than normal • Heavy volume shows conviction among big investors • That convictions is needed for the stock to make a big move • Check “Big Picture” to confirm market is in “Confirmed Uptrend”

  19. Example of how you could have used this routine to find winning stock in uptrend started 12/20/11

  20. Example of how you could have used this routine to find winning stock in uptrend started 12/20/11

  21. Example of how you could have used this routine to find winning stock in uptrend started 12/20/11 Two weeks later RAX broke out

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