Dear Reader,
In Patters & Profits this week, we talked about:
The one AI stock I like in the long and short term…
The most important number you should check every day as a trader…
And the future of the S&P, according to this predictive indicator.
So, before we close up shop for the weekend, I want to go through the following questions I pulled from the mailbag over the last few days.
Remember, you can send me a message at any time, too. Just keep in mind that I can’t give you any personalized advice or guidance – so save those questions for your broker.
Now let’s jump in…
Q: I’ve been getting your Top Movers list from time to time… What’s the best way to use this valuable information? Should we buy the stock or set up a call option on the stock and buy an option one month out?
A: Thanks for the email! My Top Movers list shows the stocks that are moving either up or down. These are the stocks and exchanged traded funds (ETFs) that are moving at least 1% a day between the high and low.
Here are today’s top 10 movers in the S&P:
These are the stocks that are moving the most in correlation to the SPDR S&P 500 ETF Trust (SPY) over the past seven days. So, it’s not bullish or bearish per se… They’re the ones that are moving the most. I use this list in conjunction with bullish or bearish indicators to give me direction. Then, I use that information to decide on the best option trade to make.
You’re probably not the only one with this question, so I’ll do a video on this for you in the near future. Thanks for the great question!
Q: Hi, I need more information on the stop limit order:
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Would you use a buy stop limit when the price of the stock is now above what you’re willing to pay?
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if that is the case, why wouldn’t you just have a limit order for the price she wanted to pay?
Please give us more info on why one would use this, how, and when. Thanks!
A: Hi – and thanks for the email about stop orders! First you are correct in that I use the stop once a price reaches a level where I feel the stock is going to burst out even higher.
Many stocks have buy programs that are computer generated at certain levels, and my team and I like to feel the market out for those levels. Even if they get hit, the stock often meanders, so I wouldn’t want it in that case.
I like limit orders when I want to get filled at my price… But that means I might have to wait patiently for the trade to move higher.
So, remember, STOPs are for when I want to get on something that’s moving higher. I use them when I just want a more probable move and will pay a little more if I have a higher probability of a move higher, quicker. We’ll take a deeper dive into this in the future on a real-time case study. Stay tuned…
Q: Good day Tom Gentile – utmost appreciative of your time! Would it be possible to back test the top five 52 weeks list after breaking their 52 weeks high… stocks that tend to power trend/move higher after break 52 weeks high?
A: Hi, it just so happens that I have a scan for that! I agree with you that strength brings on more strength… So, I’m going to do a video for you on the stocks trading at 52-week highs that are most likely to break even higher. Great question – and great video idea! Thank you!
I’ll be back on Monday to walk you through all five points of the market (stocks, bonds, commodities, currencies, and cryptocurrency).
Until then – enjoy your weekend!
Tom Gentile
America’s Pattern Trader