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Cabot Investors Conference 2013www.cabot.net Chart School! Mike Cintolo VP of Investments and Chief Analyst Cabot Market Letter, Cabot Top Ten Trader

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Presentation on theme: "Cabot Investors Conference 2013www.cabot.net Chart School! Mike Cintolo VP of Investments and Chief Analyst Cabot Market Letter, Cabot Top Ten Trader"— Presentation transcript:

1 Cabot Investors Conference 2013www.cabot.net Chart School! Mike Cintolo VP of Investments and Chief Analyst Cabot Market Letter, Cabot Top Ten Trader

2 Cabot Investors Conference 2013www.cabot.net Primer Stream of Consciousness Looking for Familiar Faces “Seven-in-10 Rule” Supply & Demand is the Aim

3 Cabot Investors Conference 2013www.cabot.net Daily Chart: More detail, less perspective 50-day moving average (thick black) 200-day moving average (thick green) Stock’s daily movement Stock’s daily volume 25-day moving average (thin black) Chart is nine to eleven months

4 Cabot Investors Conference 2013www.cabot.net Weekly Chart: Greater perspective, less detail Stock’s weekly movement Chart is three years Stock’s weekly volume 40-week moving average (thick green) 10-week moving average (thick black) Earnings line

5 Cabot Investors Conference 2013www.cabot.net Market Timing: Trends the Key Nasdaq Summer/Fall 2008 Big Moves are What Really Count! Simple, common moving averages work best Cabot Tides Sell

6 Cabot Investors Conference 2013www.cabot.net Support/Resistance: Nope

7 Cabot Investors Conference 2013www.cabot.net Secondary Measures: Defense vs. Growth XLP – Consumer Staples (Defense) SOX – Semiconductors (Growth)

8 Cabot Investors Conference 2013www.cabot.net Watch the Big Leaders AAPL January 2008 FSLR January 2008Nasdaq January 2008

9 Cabot Investors Conference 2013www.cabot.net Characteristics of Sound Bases 20% to 35% Deep Usually Best Bullish Volume Clues Many Weeks Long Tightness at Lows and Near the End Smooth Pattern

10 Cabot Investors Conference 2013www.cabot.net Buying: Bases and Breakouts Bases = Launching Pads Best if formed during Market Corrections New issue Tight Vol Dry Up Lots of “tails” Demand 6 weeks up 10-week RP confirms CROX first base fall 2006

11 Cabot Investors Conference 2013www.cabot.net Base-Within-A-Base If Base > 40% deep, expect multi-week, tighter base at end Tighter, proper structure (25%, 16 weeks) 55% from top to bottom

12 Cabot Investors Conference 2013www.cabot.net Volume Clues Market in Correction, AAPL building a base Support Gap Up on Big Volume

13 Cabot Investors Conference 2013www.cabot.net Volume Clues When buying a breakout, want OVERWHELMING volume – 200% or more vs. average GMCR up 40% (!) on 9x Avg. Volume Up 60% in four months

14 Cabot Investors Conference 2013www.cabot.net In Gear vs. the Indexes? AMZN new highs ahead of market S&P 500

15 Cabot Investors Conference 2013www.cabot.net In Gear vs. the Indexes? S&P 500 in obvious, clear downtrend MYGN out of gear, fails after market gets going

16 Cabot Investors Conference 2013www.cabot.net Big Liquid Breakouts STP is liquid, in good group, stages big breakout – I missed it! Always respect big breakouts from liquid growth stocks!

17 Cabot Investors Conference 2013www.cabot.net Buying: Stocks in Uptrends 6+ weeks up in a row a sign of persistent accumulation 13 weeks up in a row right as bear market ends! Another 13 weeks in a row!

18 Cabot Investors Conference 2013www.cabot.net Smooth Uptrends Notice how EBAY’s uptrend is smooth and persistent EBAY doubled from this point during next 18 months

19 Cabot Investors Conference 2013www.cabot.net Prepare for Shakeouts Big reversal on huge volume Just a blip! Don’t freak out over one- or two-day wiggles Bull retreats usually sharp, brief = scare you out

20 Cabot Investors Conference 2013www.cabot.net Prepare for Shakeouts Bull retreats usually sharp, brief => scare you out

21 Cabot Investors Conference 2013www.cabot.net Tightness a Good Sign TASR advances 300% in next four months! Light volume Tightens up

22 Cabot Investors Conference 2013www.cabot.net Quiet also a Good Sign Notice small, tight weekly ranges and dry-up in volume. The eye has come off the stock!

23 Cabot Investors Conference 2013www.cabot.net Selling is the Hardest Part You’ll either be Too Early, or Too Late No One Perfect Rule When in Doubt, Trail your Stop Decide Ahead of Time How to Handle

24 Cabot Investors Conference 2013www.cabot.net Moving Averages 50-day line is a simple, effective trailing stop... but it’s not perfect A couple of shakeouts but adheres to the 50- day for months

25 Cabot Investors Conference 2013www.cabot.net Moving Averages Weekly chart with 10- week line works, too Sell on decisive break of 10-week line

26 Cabot Investors Conference 2013www.cabot.net Moving Averages With a big winner you can use 40-week line (200-day) to give stock more breathing room Hold through big corrections b/c huge profit Sell!

27 Cabot Investors Conference 2013www.cabot.net How Far From Last Base? Running for 7 months Breakout No set time is “too long” but > 6 months without consolidation is long

28 Cabot Investors Conference 2013www.cabot.net Out of Trend on Upside Above multi- month uptrend Harder to define but can provide a heads-up to book partial profits

29 Cabot Investors Conference 2013www.cabot.net Volume Resistance Cluster of big-volume selling creates resistance in intermediate-term

30 Cabot Investors Conference 2013www.cabot.net Earnings Gaps 8 times out of 10, a crushing earnings gap => lots of downside ahead Falls another 95% over next year!

31 Cabot Investors Conference 2013www.cabot.net RP divergence + Huge Selling RP fails to confirm twice, each time followed by big selling

32 Cabot Investors Conference 2013www.cabot.net Two/Three Gaps in a Row Two or three gaps after upmove can, at times, put in short-term top Three gaps in a row

33 Cabot Investors Conference 2013www.cabot.net


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