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MLR - PMP 9/24/13

Major averages finished lower on lower volume despite a couple of Fed officials expressing support for continued bond purchases by the Federal Reserve. A number of leading names also had sharp pullbacks after big price run-ups including YY, NFLX, YELP, and TRLA. That said, the markets have been rallying for three weeks, and with the market's uptrend now obvious to all, the crowd may be stymied as the market goes through a process of digesting gains.

With respect to any positions in leading names that have come under pressure in recent days, one may opt to strictly abide by the Seven-Week Rule which is designed to capture bigger gains should a stock continue to rally, even after a sharp correction, if the stock tends to obey its 50-day moving average rather than its 10-day moving average. Alternatively, you could trade a core position in this manner while maintaining tighter stops on additional shares purchased further up during the stock's move. Selling into strength this year has worked better in many cases than using slower sell rules. In this light, one could also simply use a violation of the 10-day moving average as a stop on a full position, regardless of the stock's tendency to obey the 10-day or 50-day moving average.

Apple (AAPL) reported record iPhone 5S and 5C sales causing the stock to gap up at the open. However, the lack of killer apps in its pipeline will be problematic, and android which is open source will most likely overtake AAPL's closed source technology. The move ultimately may be shortable, but requires further monitoring at this time.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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