Adding a new trading criteria – Trend analysis

avatar By: IS
Date posted: 07.22.2010 (4:00 am) | Write a Comment  (6 Comments)

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Regular readers know that most of the data that I use when deciding on trades is fundamental. That is a good reason why our picks have averaged 60% this year. But we do also use some technical factors such as moving average, highs and lows. It’s not the most important factor but last year we got burned on a couple of picks simply because the momentum was too strong. Going short on Baidu is a painful memory but once that serves me every week when doing stock picks.

The main factors that I consider are:

-News and general momentum (traffic, data, etc)
-Earnings per share
-P/E ratio
-Estimated P/E ratio for next year
-Return of the stock year-to-date
-Sales growth
-Analyst ratings
-Stock momentum (trend analysis)

While I am more than happy with the 60% return (obviously!!), I’m always looking for ways to improve the performance or help it be more sustainable.. and so I found one way to do just that

I am now ready to add one more criteria, trend analysis. While I had been looking at charts to get a general sense of the technical momentum, it was somewhat of a imprecise science. That is now changing as I am now using Ino’s Trend Analysis. Just a bit of background.. Ino is a website that offers technical information about stocks and futures. One of the tools that I have been playing with is their trend analysis.

What is it?

It takes technical data such as moving averages, highs and lows and converts it into a score between +100 and -100. Obviously, the higher, the better. Here is an example of the result I got for Google today:

The score of -65 is not very surprising given everything that is going on with Google lately but obviously I’m still a bull. So this, like every criteria will become another usefull tool for me in my stock picking. I mentionned to Ino that I would be discussing this tool and they offered to give any users a 2 week trial. You do not need to enter a credit card or anything of that nature, a true 2 week trial. It’s well worth the try in my opinion.

If you are interested in the 2 week trial, simply click here

There are many many different features available with this trial and I honestly have only beeen using this trend analysis up to now but you can certainly give the rest a try.

1-It takes about 30 seconds to sign up
2-Once that is done, you will receive your user & password by email
3-When you log in, simply type the ticker in the upper right corner

Then, you will get this result:

You can also get these results by email but again, I have not tried that out yet.

Let me know your thoughts on it, I honestly think that it will help me in making the “technical trends analysis” a lot less subjective thanks to the score. Will keep you posted on the progress.

Have you tried it?

So my question would be, have you ever tried this service or another one that is comparable? How have they worked for you? I would not trade on this data alone, but that is nothing negative. There is no factor that I would trade alone.

More on this topic (What's this?)
Baidu Inc Hits Key Level: Beware Of Earnings Today
Chinese Stocks Hot: These Names Will Run
Read more on Baidu.com at Wikinvest
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6 Comments

  1. avatar

    [...] TickerNamePriceEPSPE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingTrend Analysis [...]

  2. avatar

    [...] the growth rate, you can see exactly why I am making this pick. I am a bit surprised to see that the trend analysis score for Yahoo is so high because the stock is down significantly since [...]

  3. avatar

    [...] was a bit surprised to see Research in Motion’s superior trend analysis but that originates mostly from  the recent rise after RIMM displayed its Playbook which simply [...]

  4. avatar

    [...] is very close, no doubt about it, a slight edge goes to YUM in terms of its trends analysis but otherwise, very [...]

  5. avatar

    [...] at charts getting technical indicators such as trend analysis -Going to read the company’s financial reports -Listening to earnings calls as well as [...]

  6. avatar

    [...] not anywhere close to last year’s very solid results. Today, I’m opening a trade that I opened just a few months ago with success.  This one comes as no surprise for the IntelligentSpeculator Tech Mailing List members (free to [...]

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