Despite the market rebounding last week after a 3-day rally, traders are still in a daze as they try to figure out the true impact of the coronavirus. The U.S. has now topped 100,000 coronavirus cases, and many of us are quarantined at home.
Now, I know many people are bored and want to step their game up — so in order to help as many people out as possible, I opened up a discussion with my readers… responses poured in and many of you asked: how do I find stocks to trade?
In this market environment, I believe that location is key. In other words, knowing where to look for momentum trading opportunities. For the most part, I’ve found success in small- and mid-caps.
Today, I want to walk you through exactly how I filter down thousands of stocks out there down to just a handful — as well as one key pattern I’m using to hunt momentum stocks in this environment.
If you just go to Finviz and hit the “Screener” tab, you’ll notice there are more than 7,500 stocks for us to trade!
Of course, it could be overwhelming at first… but there are a few things you could use to narrow down your stock trading universe. For me personally, I like to keep things simple by scanning for stocks with just a few specific criteria:
To keep things simple, I look for stocks that are under $30 and have at least $2M in liquidity near the open of the market.
Pretty easy, right?
My scanner only lets me know which stocks are moving on the day… but it’s up to me to figure out which ones have the highest probability of success. In order to figure out which stocks are poised to explode, I rank my filter based on percentage change… then I look at the charts of the top 10.
Let me show you how it all works.
The “higher low bounce” is one pattern I’ve kept my eye on in this market environment. Basically, it’s my trusty fish hook pattern that actually materialized… settles for a day or two… then continues higher.
I’ve found the the range is less on the subsequent continuation of the bounce. However, the stop loss is fairly identifiable still and the continuation fairly predictable, assuming the markets trades sideways or higher.
This allows me to properly plan my trades.
I saw this setup in SIEN.
I want you to get into the habit of spotting these patterns on your own, but if you look at the chart in SIEN above… it looks like a fish hook, right?
I spotted a similar pattern in CHEF recently, which was good for a 30% winner. Now, with SIEN, I sent out an “advanced notice” alert to my clients…
From today’s watch list. This is the ideal pattern of bounce, rest and bounce again. See TLRY chart a few days ago for example. OSTK is the same pattern, I’m watching that closely too. $2 is the pivot here so I’m looking to buy above that level, stop below. 10-20% profit goal.
This let my clients know I was looking to get into SIEN… and 11 minutes after, I bought shares of SIEN at $2.33 and planned to take profits around 5-10% higher.
Guess what happened with SIEN?
The stock broke above my target, and I was able to sell half of my position at $2.72! That was good for about $2,000 or 18%. As you can see, SIEN actually pulled back, but I had a profit stop on, so I sold my remaining shares at $2.44. In total, I was able to lock in $2,500 on the trade.
If you’re struggling to find stocks to trade in this environment, I want to show you that it’s not as difficult as you may think… and it’s as simple as just scanning for stocks and looking at two key patterns.
For a limited time only, you can watch this exclusive rebroadcast of Jason Bond Unchained… and learn how to potentially make money trading on a part-time schedule.
Yesterday, we witnessed a record number of Americans file for jobless claims, as unemployment claims skyrocketed to 3.28 million last week.
The coronavirus has crippled the economy, but if you looked at the market yesterday… it was a different story. It’s been a tough environment for many traders and so difficult to decipher the headlines… and if you suffered losses in the bear market — don’t beat yourself up.
I was in the same boat not too long ago, as I told more than 5,000 viewers in this video — I myself am coming off a stretch that might’ve turned many seasoned speculators off trading for good.
However, I knew I could bounce back… and all I needed to do was go back to the drawing board. I figured out what I was doing wrong, and when I actually thought about it — I wanted to kick myself.
I realized that location is key in this market environment, and I couldn’t just trade what was moving. Once I started looking in the “right” areas… I saw the profits start to roll in.
Just last week, I made over $42K in trading profits over at Jason Bond Picks, and I’m 3-for-3 with more than $17,000 in realized profits in Weekly Windfalls, too.
That said, I want to show you how I’m scoping out — and profiting from — some small pockets of strength in the current market climate, as well as the 3 major changes I’ve made to adapt to this environment.
I’m not used to starting the year with my portfolio in the red.
By this time last year, in fact, I was sitting on profits of roughly a half-million dollars, comfortable enough to commit a chunk to St. Jude and take my lovely wife Pamela and son Noah on a weeks-long vacation.
So when 2020 started out bumpy, it was frustrating, to say the least.
However, the recent steps I’ve taken to right the ship are paying dividends in a BIG WAY.
Here are the major changes I’ve made to pivot recently:
I moved a healthy chunk of my trading capital to savings and Noah’s college fund, reducing the dollar size of my available funds.
This helped me sleep better at night, knowing I wasn’t going to risk that cheddar in uncertain times.
I know this is a luxury, and I feel beyond fortunate to have the option.
That being said, by committing my 2020 trading profits to charity ahead of time — especially being in the hole to start the year — it gave me something extremely precious to play for, without putting a ton of added weight on my shoulders. (Or, if it is a weight, it’s a relatively light one which I’m honored to carry.)
I knew that by using fewer dollars to play with, I would HAVE to bring my A-game — it’s that or go bust, which was a nonstarter for me.
Along with selling “anxiety premium” to make money at Weekly Windfalls, I decided to go back to a trusty trading bucket and refocus on a relatively short watchlist of MOMENTUM STOCKS, which consistently deliver big profits in ANY market environment — including a massive sell-off.
A main component of an option’s price is implied volatility (IV).
In the simplest terms, IV reflects the market’s expectations for a stock’s volatility over a certain period of time.
See, when traders expect a stock to be volatile, they’re willing to pay more to buy those options.
That’s because compared to options on a relatively predictable stock, the options on a volatile stock have a better chance of moving in-the-money (ITM) by expiration, because the shares could make a monster move.
That said, the VIX is often called the “fear index” of Wall Street — and we haven’t seen a VIX this high since the 2008 financial crisis, which means options in general are expensive.
And as with anything, if you’re a seller — like we are in Windfalls — you want to get as much money for your goods as possible — higher prices are a good thing.
I mean, we were already at an advantage over option buyers by default, considering nearly three-quarters of option trades resolve in the sellers’ favor.
They call the credit spread the “casino strategy” because of its high win rate, and that’s because you can make money if the stock:
In other words, while an option buyer has to choose the direction, magnitude, and timing of a stock’s move in order to profit, an option SELLER just has to determine where the stock WON’T go in a period of time.
That said, I’ll continue to hunt down potentially winning credit spread candidates like Shopify (SHOP), Apple (AAPL), and Warren Buffett favorite RH Inc (RH).
Along with the fact that fear drives options prices higher, if there’s one thing I’ve learned over my decade of trading, it’s that you can make money on momentum stocks until the cows come home.
They’re evergreen. Always around. Eternal. So on and so forth.
What I’m trying to say is, you can find pockets of strength no matter the conditions on Wall Street — and that includes amid a global pandemic.
Last week I broke down some teachable moments on my roughly $10,000 winner on Biomerica (BMRA) shares.
Sure, the stock moved because the company began shipping samples of rapid COVID-19 tests.
However — this was NOT just a “Jay got lucky on a coronavirus stock” story.
No, the REASON I spotted the BMRA breakout — along with all the other winners in Jason Bond Picks last week — was because of my TRADING EDGES.
If you don’t have a trading edge, you’re speculating with a blindfold on. But I can guide you every step of the way — whether that’s teaching spreads in Weekly Windfalls, or showing you how to make quick profits on momentum stocks in Jason Bond Picks.
Specifically, along with the “casino strategy,” one of my edges is scanning for and spotting continuation patterns like the BULL FLAG, which is what led to my big BMRA win.
In addition, patterns like the trusty REST & RETEST helped me score a nice gain on pot stock Tilray (TLRY) last week.
And there are several other patterns and clues to sniff out a momentum stock winner.
Something many of my subscribers have expressed joy about, and something I wish I’d launched 10 years ago:
In a nutshell, I’ve been alerting clients to my stock and options trades BEFORE I pull the trigger.
Advance Notices are especially advantageous in these market conditions, because stocks move SO FAST amid the broader volatility, that without a heads-up, you oftentimes wouldn’t be able to get into the trades or the spreads around the same price as me.
And I love the new process because it gives me a better platform to TEACH about trading, which is my passion.
I’m also excited to do something at Jason Bond Picks that RagingBull has NEVER DONE BEFORE: I’m offering a 30-day money-back guarantee, to subscribers who take my brand-new LEARNING COURSE and still decide they want out.
That’s the fairest handshake in the newsletter world — my competitors should be scared.
Stay safe out there.
The other night, I announced I would be changing the game — and my competition is so mad at me right now because they just can’t keep up.
I don’t see anyone in the industry doing anything remotely similar to me… and your success means a heck of a lot more to me than my own.
Today, I want to prove that to you by giving you a taste of one of my most powerful tools — my coveted scanner… the same scanner I use to hunt down momentum stocks every single trading day.
You see, I believe location is key to uncovering money-making opportunities. However, there are thousands of stocks out there, and we can’t trade all of them.
In order to help as many people out in this market environment, I want to show you how to potentially uncover stocks poised for explosive moves… as well as the one thing that’s got my competitors fuming.
How many times have you woke up and walked over to your trading desk (or pulled up your mobile platform), and wondered to yourself: What am I going to trade today?
Only to scramble and just fire off a random trade and lose money in it. If that sounds familiar, it’s okay… because I was in the same boat before at one point. However, I realized how simple trading could be if I just narrowed my focus and looked for the right stocks to trade.
In order to show you how powerful my scanner is, I want to walk you through a real-money case study.
When it comes to filter down the thousands of stocks out there, I only want to trade stocks that are under $30 and have at least $2M in liquidity near the open. Thereafter, I just rank the stocks by percentage change on the day, as you can see below.
Pretty simple, right?
Now, I don’t just randomly buy whatever is popping up on my scanner. I actually conduct my due diligence and make sure one of my high-probability patterns comes up in the stock. If you look at the screenshot of my scanner above, you’ll notice at the very end, I outlined CHEF.
It satisfied my filter requirements, and when I looked at the chart… it was a screaming buy to me, but I knew I needed to be patient and keep an eye on it. My work was pretty much done, and all I needed to do was execute.
Here’s what I sent out in my watchlist to Jason Bond Picks clients…
CHEF I’ve been watching closely and think $6 is the range I’ll use as my stop loss here. Range is big to $10 so looking for 10-20% above $6 seems reasonable but like most stocks right now, if the overall market starts to tank again it’s going to weigh on these positions.
Remember, I’m putting my clients’ wants and needs first because I want them to find success in the markets.
One of the main problems with trading services is a lot of the times, by the time clients get the alert, the stock or option has already moved too far up. The end up feeling like a sucker because they might’ve missed the move…or chased.
I don’t want that to happen to any of my clients… so I came up with my “ADVANCE Notice” alerts.
I don’t see anyone else in the game doing what I’m doing… and I want to show you EXACTLY how it works. Not only did my clients get a heads up about CHEF as a potential trade on my watchlist… but I also sent out an advanced notice, letting them know I would be getting in soon.
There were a few things I liked about CHEF, as I outlined in my “CHEF advance notice” email at 10:30 AM on Monday…
Up from a low of $3.55, CHEF has crossed a key resistance area at $6, which opens up immediate range tot he upper $7’s. Not huge, I get it, but can’t expect last week’s prices now that the markets are at least trying to bottom. My entry-level here would be above $6 and my goal is about $8, though if we get a real rip in the markets, I’m hoping range to $10 unleashes fast. But again, sticking to very small 10-20% targets on all trades and even happy with 5%.
Fishhook and tradable levels for my entry and exit drew on the chart below.
Now, about 35 minutes AFTER I sent that advanced notice alert, I entered CHEF.
I scooped up 4,000 shares of CHEF at $6.42. My stop loss was in the range of $6, and my target was in the upper $7 area.
The thing is, I planned to hold this overnight… and guess what happened the very next morning?
CHEF was gapping up!
Of course, after CHEF broke above my profit target, I took my money and ran.
In this market environment, I want to do my best to help stack the odds in your favor. With my scanner and “advance notice” alerts, I believe you have the necessary tools to hunt down momentum stocks.