If you are not comfortable in following this system and entering into stocks in this list, thinking that these stocks have already gone up too much… you can tweak this strategy…
- You take this list as your raw data, upon which you can apply some discretion.
- One things is very clear that this list is of stocks and sectors which are currently in momentum. You might apply some stage analysis criteria, most of them will be in stage 2 only…but you can check if anybody is slipping into stage 3, as these stocks are taking average price of 6 months and 12 months, there is a slight chance that few stocks may have slipped into stage 3 .
- You can also see if there is fresh brrakout happening , where you can enter or some stocks are near its 10 week EMA, where you are comfortable to enter.
- Additionally you can apply some fundamental filters , where you dont want to enter into loss making companies or whose sales are not improving. When market falls start, such kind of companies will fall more, whose fundamentals are weak. Also since this list is price driven, there must be many companies which are not fundamentally sound.
- Also about exiting , this system follows systematic approach, where automatically stocks get dropped when they go out of list. But you can devise your own criteria, where if they are still in stage 2 and moving up, you will keep holding.
- But while doing all this, you need to be aware, that you are not following this system…Only makimg use of names in the list as your raw data, to stumble upon new names.