20 19 - MarketSmith

[Pages:32]20 19 ??

Q3 STOCK GUIDE

Advanced Selling Strategies

E XC L U S I V E LY F O R M A R K E T S M I T H M E M B E R S

FEATURING Mark Minervini

AUGUST 27, 2019

1:15pm PT / 4:15pm ET

We're excited to announce that U.S. Investing Champion and Stock Market Wizard Mark Minervini is joining forces with MarketSmith for a special webinar! Mark will demonstrate how he uses MarketSmith to find new stock ideas and time his trading during market hours. You'll get actionable intelligence and hear about stocks that Mark has on his watchlist. Don't miss this exciting opportunity to learn MarketSmith strategies from a master--register today!

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Stock Guide // 2019 Q3

At MarketSmith, we're big believers in rules-based trading. Rules can help counteract emotions, which can cloud even the clearest of heads when money is on the line. In this issue of Stock Guide, we'll dive into some alternative selling strategies that go beyond a profit target and a stop-loss. Which technical signals can alert you when a stock has topped and is likely to reverse? Check out our feature article, Advanced Selling Strategies, to find out.

For our interview this month, we talked to Chris Gessel, Chief Content Officer of Investor's Business Daily?. As the captain of IBD's Markets Team, Chris follows the indexes from open to close and tracks hundreds of stocks every day using MarketSmith. He shared some insights from his decades of experience, as well as a custom MarketSmith screen for finding new trade ideas.

In the latest edition of Good Trade / Bad Trade, we talked with MarketSmith Senior Product Coach Arnie Gutierrez about two of his recent trades. While he booked a nice profit jumping into the legal marijuana industry at the right time, he also got burned by the fast-moving and volatile action of a hot tech IPO. Arnie will break down his buy and sell points, how he held the stocks and what he learned from each trade.

As always, if you have any questions or comments about your investing research or any MarketSmith features, please call one of our product coaches at (800) 831-2525 or email us at reachus@. We're here to help you make more money in the market.

Best Returns, The MarketSmith Team

 // 2019 Q3

S & P 500 INDEX CLOSE 2941.76

S & P 500 Index

3150

2940.91 2916.50

2815.15 2800.18

2691.99 50 DAY MOVING AVERAGE

2603.54

2722.27

2954.13

3050 2950

2850

2728.81

200 DAY MOVING AVERAGE

2750 2650 2550

2450

2346.58 DAILY VOLUME AND 50-DAY AVERAGE DAILY VOLUME LINE

29 13 JUL

27 10 AUG

24 7 SEP

21 5 OCT

19 2

16

NOV

30 14 DEC

28 11 25 8 JAN 2019 FEB

22 8 MAR

2350

2.5 B

22 5 APR

1.4 B

850 M

500 M

19 3

17

MAY

31 14 28 JUN

NASDAQ COMPOSITE CLOSE 8006.24

NASDAQ Composite

8700 8500

7933.31

8133.30 8107.38

8176.08

8300 8100 7900

7604.24

7419.56

50 DAY MOVING AVERAGE

7486.51

6922.83 6830.76

7332.92

200 DA7Y292.21 MOVING AVERAGE

7700 7500 7300 7100 6900 6700

6500

6190.16 DAILY VOLUME AND 50-DAY AVERAGE DAILY VOLUME LINE

29 13 JUL

27 10 AUG

24 7 SEP

21 5 OCT

19 2 16 NOV

30 14 DEC

28 11 25 8 JAN 2019 FEB

22 8 MAR

6300 6100

22 5 APR

4B

2.5 B

1.6 B

850 M

19 3 17 MAY

31 14 28 JUN

4

Table of Contents

Market Charts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Feature Article: Advanced Selling Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . 6 A Conversation with Chris Gessel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Bigger Better IPOs*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Zoom Video Comm Cl A (ZM). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Zscaler Inc (ZS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Docusign Inc (DOCU) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Anaplan Inc (PLAN). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Avalara Inc (AVLR). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Smartsheet Inc Cl A (SMAR). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Pinterest Inc Cl A (PINS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Beyond Meat Inc (BYND). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Good Trade/Bad Trade: Arnie Gutierrez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Institutional-Quality Movers*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

eHealth Inc (EHTH). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 The Trade Desk Inc Cl A (TTD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 CyberArk Software Ltd (CYBR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Globant SA (GLOB). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Kirkland Lake Gold Ltd (KL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Universal Display Corp (OLED). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Features Highlight: Smart Alerts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Connect with Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

*All screen results are computer-generated and were run on June 28, 2019.

5

 // 2019 Q3 l Feature Article

Feature Article: Advanced Selling Strategies

It's important to remember that buying stocks should be based on a combination of fundamental and technical factors, while selling stocks should be based primarily on technical factors. Two of the most famous and successful sell rules from William O'Neil's How to Make Money in Stocks are:

1. Sell a stock offensively when it's up 20-25%

2. Sell defensively when it falls 7-8% below your buy point

These selling rules will serve you well for maximizing gains and minimizing risk.

That's not to say that alternative selling strategies shouldn't be utilized. These strategies take advantage of the fact that you, as an individual investor, can respond much more rapidly to technical factors than can a large institution. While it can take institutions weeks or months to accumulate enough shares for a position, you can buy or sell a full position in milliseconds without affecting the overall stock price.

Here are a few technical indicators you can use as early signs that you might want to sell some or all of a position.

Breaking below the 21-day moving average line. In a confirmed uptrend, most high-quality growth stocks will hold above their 21-day line when they're on a strong run. If a stock breaks below its 21-day line on aboveaverage volume, it's likely on its way down to the 50-day line. Selling at least part of your position will lock in some gains.

Breaking below the 50-day moving average line. This is similar to the 21-day line strategy above, but it indicates a stronger sell signal. Many of the MarketSmith Coaches will use a 50-day line break on heavy volume as an indicator to sell the remainder of their position.

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 // 2019 Q3

Channel Line Break. This happens when a stock has set up its general trading range during a steady run, then starts behaving atypically well. This can mean it's a good time to book some profits, as the stock may have topped.

Channel Line Break 50-day

TIP: To turn on the 21-day moving average line in MarketSmith, click the Wrench Icon above the Chart Window and select "Moving Averages" from the drop-down menu. In the Daily Moving Averages section, choose "21" for either the green line or the pink line. This will be your 21-day line on the chart.

Wrench Icon

Moving Averages

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 // 2019 Q3 l Q & A: Chris Gessel

A Conversation with Chris Gessel

Chris Gessel has been covering the market for Investor's Business Daily? since 1996. From 1999 to 2004, he was the primary author of The Big Picture, IBD's premier market analysis column. As IBD's Chief Content Officer, he directs market, mutual fund, company and technology coverage, and serves on its executive committee.

MarketSmith recently sat down with Chris to talk about market trends, 2019 IPOs and technical analysis.

Q: Let's talk current market. Which sectors are you particularly bullish on as we head into Q3?

I'm watching semiconductors and software. Software has been the big leader this year. Look at Veeva (VEEV) -- Leaderboard took a 20% gain on this, but it just keeps going. Other names like Zscaler (ZS) and CyberArk (CYBR) are setting up nicely after their initial bullish breakouts. There are just so many software stocks working well.

"If a trade deal gets done, I would expect [the semiconductor sector] to continue higher."

Cybersecurity software is where most of the action is happening. CYBR, ZS and Rapid7 (RPD) are some names to watch in that group. Okta (OKTA) is not profitable, but it's having a big move. RPD is one I would keep an eye on. It's just now turning profitable, so it doesn't have the long track record of profitability favored by CAN SLIM?-style traders, but it's on my watchlist.

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