Stock of the Month: Vertex (VRTX)
Our portfolio is up by more than 15% in the month of November. We are strictly following Mark Minervini's Trading Methodology. Here is a quick summary:
Mark Minervini's trading methodology, often encapsulated in his SEPA (Specific Entry Point Analysis) system, is a comprehensive approach to trading that emphasizes the importance of timing, risk management, and stock selection. Here’s a concise summary:
Trend Template: Minervini looks for stocks in a strong uptrend, using specific criteria for moving averages and price action to determine the health of the trend.
Volatility Contraction Pattern (VCP): He identifies stocks undergoing a VCP, a series of tightening price consolidations which often precede a significant breakout.
Risk Management: He sets strict stop-loss orders to limit potential losses, often using a maximum risk threshold per trade to manage overall portfolio risk.
Buy Points: Minervini waits for a proper pivot point before entering a trade, ensuring the stock is moving on high volume out of a sound base pattern.
Leadership: Preference is given to market leaders, stocks that outperform the market with strong earnings growth, sales, return on equity, and profit margins.
Market Direction: He trades in harmony with the overall market direction, increasing exposure during bull markets and preserving capital during bear markets.
By focusing on these key principles, Minervini aims to capture significant trends, minimize losses, and compound gains efficiently. Remember, this strategy requires discipline, continuous learning, and the ability to adapt to changing market conditions.
Stock of the Month November: Vertex
Detailed Technical Analysis
Price and Moving Averages: The price of VRTX has recently experienced a bullish breakout. It is trading above all key moving averages (MA), including the 50-day, 100-day, and 200-day MAs, which are aligned in ascending order—a bullish signal known as a 'golden cross'. The 50-day MA is often used as a short-term trend indicator, and its position above the longer-term MAs suggests a strong upward trend.
Volume: There's a noticeable increase in volume accompanying the price rise, which is a positive sign as it indicates strong buying interest.
Moving Average Convergence Divergence (MACD): The MACD line is above the signal line and above zero, which is bullish. The histogram is showing increasing momentum to the upside.
Relative Strength Index (RSI): The RSI is above 70, which typically indicates overbought conditions. However, in strong trends, the RSI can remain overbought for extended periods.
IBD Ratings: The IBD (Investor's Business Daily) ratings show a high relative strength rating of 93, suggesting that the stock is outperforming 93% of all other stocks in terms of price performance.
Bollinger Bands: The price has moved towards the upper Bollinger Band, which could signal that the stock is overextended in the short term.
Support and Resistance: The chart shows previous resistance around the $360 level, which appears to have been decisively breached and may now serve as support.
Candlestick Analysis: The recent candlesticks show strong bullish bodies, which confirms the buyers' control.
Price Targets: If you're using chart patterns for price targets, the recent breakout suggests a continuation of the uptrend.
Potential Risks: The overbought RSI readings could indicate a potential pullback or consolidation in the near term. Additionally, the elevated volume on up days should be monitored to ensure it doesn't start declining, which could signal a weakening trend.
Here is a link top our updated portfolio:
www.tradingview.com/...atchlists/128292848/
Mark Minervini's trading methodology, often encapsulated in his SEPA (Specific Entry Point Analysis) system, is a comprehensive approach to trading that emphasizes the importance of timing, risk management, and stock selection. Here’s a concise summary:
Trend Template: Minervini looks for stocks in a strong uptrend, using specific criteria for moving averages and price action to determine the health of the trend.
Volatility Contraction Pattern (VCP): He identifies stocks undergoing a VCP, a series of tightening price consolidations which often precede a significant breakout.
Risk Management: He sets strict stop-loss orders to limit potential losses, often using a maximum risk threshold per trade to manage overall portfolio risk.
Buy Points: Minervini waits for a proper pivot point before entering a trade, ensuring the stock is moving on high volume out of a sound base pattern.
Leadership: Preference is given to market leaders, stocks that outperform the market with strong earnings growth, sales, return on equity, and profit margins.
Market Direction: He trades in harmony with the overall market direction, increasing exposure during bull markets and preserving capital during bear markets.
By focusing on these key principles, Minervini aims to capture significant trends, minimize losses, and compound gains efficiently. Remember, this strategy requires discipline, continuous learning, and the ability to adapt to changing market conditions.
Stock of the Month November: Vertex
Detailed Technical Analysis
Price and Moving Averages: The price of VRTX has recently experienced a bullish breakout. It is trading above all key moving averages (MA), including the 50-day, 100-day, and 200-day MAs, which are aligned in ascending order—a bullish signal known as a 'golden cross'. The 50-day MA is often used as a short-term trend indicator, and its position above the longer-term MAs suggests a strong upward trend.
Volume: There's a noticeable increase in volume accompanying the price rise, which is a positive sign as it indicates strong buying interest.
Moving Average Convergence Divergence (MACD): The MACD line is above the signal line and above zero, which is bullish. The histogram is showing increasing momentum to the upside.
Relative Strength Index (RSI): The RSI is above 70, which typically indicates overbought conditions. However, in strong trends, the RSI can remain overbought for extended periods.
IBD Ratings: The IBD (Investor's Business Daily) ratings show a high relative strength rating of 93, suggesting that the stock is outperforming 93% of all other stocks in terms of price performance.
Bollinger Bands: The price has moved towards the upper Bollinger Band, which could signal that the stock is overextended in the short term.
Support and Resistance: The chart shows previous resistance around the $360 level, which appears to have been decisively breached and may now serve as support.
Candlestick Analysis: The recent candlesticks show strong bullish bodies, which confirms the buyers' control.
Price Targets: If you're using chart patterns for price targets, the recent breakout suggests a continuation of the uptrend.
Potential Risks: The overbought RSI readings could indicate a potential pullback or consolidation in the near term. Additionally, the elevated volume on up days should be monitored to ensure it doesn't start declining, which could signal a weakening trend.
Here is a link top our updated portfolio:
www.tradingview.com/...atchlists/128292848/
Combing the BEST of two WORLD's: Cathie Wood & Mark Minervini