RE-POSTING - HOW TO SPOT LEADERS

The stock market, just like in school, tends to favor those kids with high/leading grades. This
is evident in the phenomena that stocks that are already high, tend to go higher. In this
sense, we have an edge as to what names to trade if we can spot those leaders.

How do we spot leaders? We simply score the stocks based on their year-to-date (YTD) and
month-to-date(MTD) performances, add their scores, and rank. It’s that easy.

For those who do not have market data, Investagrams’ Screener will do.

Step 1.From the InvestaScreener, run stocks with the following criteria:

No. Item Description Input

1. Year to date % UP
2. Month to date % UP
3. Value Average (20 days) Value Average >=5M

Step 2. Export results to excel file. From the excel file, sort the column “YTD%” from largest
to smallest. In another column, put a corresponding score starting with no. 1 to the largest
YTD%, no. 2 to the second, so on and so forth.

Step3. Do the same with the column “MTD%” and assign the appropriate score.
Step 4. Add the columns YTD% Score and MTD% Score under “Rank” column. Sort the
column “Rank” from smallest to largest. It depends how many stocks you want to hold
initially, but I suggest picking the top 10 leaders.

You can try to time the buying those names, but I suggest you do Portfolio Trading. Meaning
buy all those 10 names, and allocate your capital using the ratios of Relative Strength Index
(RSI) values of each name to the total of 10 names. With this method, you will be allocating
more capital to stronger names.

Rebalance this on a monthly basis, or every two weeks or three weeks, is up to you.
Portfolio Trading is that simple.

The best thing about this is you can do it on your own, now na!
RETRACEMENT
RETRACE set up gives us a chance to enter the market during trends. Following are the
things to look out for:

1. The stock is trending in the medium term. We easily determine that trend is up when
20EMA is above 50EMA which in turn is above 100EMA.

2. Price is coming from a 3-month HIGH. We use Dochian Channels with 50-period
parameter to determine if the stock is coming from a 3-month high. This is shown in the
upper channels of the DC that looks like stairways.

3. Price retraces or trades between 20EMA and 50EMA. Price does not have to close below
20EMA, it is enough that the candle or bar’ Low touches 20EMA.

How to enter? Easy, you simply draw a line at the significant Highs from the 3-month HIGH,
then buy at break out of such resistance line.
How to Plot Fibonacci - The Bigote Way

1. Go to Yearly Chart. You do this by simply typing 12M in Investachart.

2. Plot Fibonacci 0%-100% to the High and Low of last year’s candle. Example, if today is
2017, plot the Fibonacci to the High and Low of 2016 candle. Now if the candle is too small,
you can go to 6-month chart. This is more of an art than science.
3. Go back to the daily chart and observe where price is at. If it is on a level where there are
no near Fibonacci levels, you can draw another Fibonacci. In the example, the Fib 1 to 1.618
is quite wide a range, so we dissect it by plotting Fib 0 to .618. It appears that PSEI is
currently experiencing resistance at smaller Fib 0.236.
4. An important takeaway from this methodology is the significance of 0.618 extension levels
when the stock goes to new 52-week high. It seems these are the levels where people take
profit, and where they buy back the stock.