Trading Diary
November 15, 2001

This is my daily short-term stock trading diary. It is intended to illustrate the techniques used in short-term share trading and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use .




USA
The recent rally is losing steam with the Dow closing up 40 points but on an inside day, with a lower high than yesterday.
 
Australia  (ASX)
The All Ords experienced a bit more selling pressure, closing up slightly at 3276 on increased volume.
 

 
Selecting Stocks
I use a 3 point process to select stocks for further study:
  1. I use the Stock Screen to rank indices based on their 3-year % Price Move, with a minimum of 50% growth, eliminating any index with a 6-month % Price Move less than zero.
    The ranking showed 4 sectors: Healthcare & Biotech; Banks & Finance; and Building Materials. I eliminated Building Materials as the sector tends to be cyclical.
  2. Using the same selection criteria, this time on All Sectors, highlight groups of stocks that may have fallen through the net.
    Quite a few wine stocks showed up, so I added Vintners to the list of Sectors for Step 3.
  3. I then screen each of the Sectors making up the selected indices, using the same selection criteria as in step 1.
    Example: Vintners - Brian McGuigan, Petaluma, Peter Lehmann and BRL Hardy were selected.
    (Tip: If you are screening a sector for the first time, right-click on the Stock Screen Results and save the list as a new Watchlist)




Conclusion
Short-term trades: use trailing buy-stops to enter trades and ensure that stop losses are placed within the 2% maximum acceptable loss.
Long-term trades: Wait for a pull-back on the secondary cycle.
 
Colin Twiggs
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Colin Twiggs

Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.

He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.