Trading U.K stock market using Mark Minervini strategy

Friday, Dec 14 2018 by
47

Mark has been interviewed by Stocko a couple of times and from some of the comments on various threads there appears to be a few of us using his methods to trade the U.K stock market. I thought it would be useful to have a dedicated thread where we can discuss how well its working.

Personally I have been in cash at least 50% since the end of May and at 95-100% since early October. Getting out of stocks as they roll over has protected me from any real damage.

I'm struggling to find many setups I want to buy so I am developing my "sit out power"

How is everyone else doing?


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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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471 Posts on this Thread show/hide all

BottleMerchant 11th Feb 232 of 471
1

In reply to post #445608

Serica Energy (LON:SQZ) is a good example of a failed breakout.
This recent tweet by Mark Minervini advises caution in the current market conditions:
https://twitter.com/markminervini/status/1093515316448120832

It should also be noted that Mark Minervini's investment strategy looks at both price action and fundamentals. He likes to see sales, EPS and margin growth. There is a section in his book where he describes his Code 33 for the perfect share.
I have my own Code 33 screen and so far the only UK share that passes all the tests is Shoe Zone (LON:SHOE)

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unwise2 11th Feb 233 of 471
2

In reply to post #445858

This recent tweet by Mark Minervini advises caution in the current market conditions:

I completely agree, the maximum exposure I have had in stocks recently has been around 10%.

The buys I have made have been toe in the water to see if I can get any traction.

It should also be noted that Mark Minervini's investment strategy looks at both price action and fundamentals. 

Forecast revenue growth and EPS growth looked great for Serica Energy (LON:SQZ), doesn't matter though if my stop gets hit I'm out.


 

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herbie47 11th Feb 234 of 471

Ab Dynamics (LON:ABDP) for anyone interested the spread at the moment is only 18p, this has really come down for when I was looking a few weeks ago when it was 100p. I have just opened a small position.

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zeibots 11th Feb 235 of 471

In reply to post #445858

Yes SQZ is a failed breakout. Good RS 6m (80.5) but a poor Industry Gp ranked 21st, RS -4.3. not worth a punt I don`t think.

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psin 12th Feb 236 of 471
1

Another of MM's pointers in his Wizard book is to look for shares that have held up during a period such as the one we have been currently experiencing. May I suggest that JLG fits the bill?

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unwise2 12th Feb 237 of 471
1

In reply to post #446233

5c62c1211df4cChart-john-laing-1212019.pn

You are right John Laing (LON:JLG) has held up quite well but it is now what MM would consider extended away from the base. There were two opportunites to buy at 330p and after it broke through 340p but the handles were fairly short and easy to miss (I did). A better base formed back in May-Aug with a much more obvious handle. I have attached a chart.

Fundamentally earnings appear to be all over the place between 2016 and forecasts to 2019

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zeibots 12th Feb 238 of 471

In reply to post #446233

Yes psin it certainly fits the bill. It broke out from strong resistance in a MM set up on 23/08/18 with three times normal volume and is the only liquid (spread 0.06%) share with a decent 6m RS in it`s Industrial Group.
Perhaps not a classical VCP but I think we are too focused on just that. MM will also admit that not all super performers are born that way. I think we should also pay more attention to Relative Strength in terms of MARKET, SECTOR, INDUSTRIAL GROUP and then the share itself. These factors working together are more important than a perfect VCP.
There are many writers who stress this point and quote examples. This subject is well presented by Bruce Kamich in his book `How Tech Analysis Works` (Chapter 12) and Chris Rowe`s `Internal Strength System` just to name a few.
Finally Stocko is a perfect site to check RS.

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mmarkkj777 12th Feb 239 of 471
3

T Clarke (LON:CTO) is still my best performing stock since I started adopting the Mark M trading principles (since mid Dec 18),

I've also had some success with Smartsheet in the US, which is my best performing US stock.

I agree that this Thread is excellent, and I appreciate the efforts of Unwise2 to keeps the posts in line with the overall theme. It makes sense in the long run.

I'm still learning a lot and will keep coming back to see what is being discussed.

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herbie47 12th Feb 240 of 471

In reply to post #446233

Yes it has, has cropped up on a few of my screens. One thing that did surprise me was the very high operating margin, around 70-80%.

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unwise2 12th Feb 241 of 471
4

In reply to post #446363

I think we should also pay more attention to Relative Strength in terms of MARKET, SECTOR, INDUSTRIAL GROUP and then the share itself

Mark has said more than once on his MPA service that early on in his trading career his search approach was:

Market

Group

Shares

He then changed his approach to:

Shares

Group

Market

His performance improved dramatically, if he finds more than 2 shares in a group setting up he then checks all the other shares in the group. In his books he makes the point that new market leaders typically bottom before the market as a whole, if you wait for market confirmation the leaders may have already broken out of their bases and become extended.

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zeibots 12th Feb 242 of 471
1

In reply to post #446443

Yes, you are quite correct and he no doubt uses software where he can move quickly from chart to chart. As you know not possible with Stocko as it is more fundamental orientated. I first use it`s strength that is RS selection and then drill down by using Sharescope where you can move from chart to chart at speed and with volume indicators of my choice.
The results are the same and it saves time for spending more time on the golf course.

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dmjram 13th Feb 243 of 471
2

RockRose (highlighted as setting up a pivot last week) broke out yesterday and is following through today.

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herbie47 13th Feb 244 of 471
3

SDL (LON:SDL) has broken out, it was mentioned on here a few weeks ago.

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unwise2 13th Feb 245 of 471
2

In reply to post #446788

5c640f9e9749f5_minute_RRE.JPG

RockRose Energy (LON:RRE) would have been tricky to buy if you trade with a stop of 10% or less, the pivot mentioned last week around 670p was 70p away from the previous contraction to 600p. It then set up a short handle with a pivot of 690 and a contraction to 630p- less than 10%. However it shot through the pivot yesterday to 724p in the first five minutes of trading. The only likely way to have bought it was after it pulled back

It's crazy but sometimes you can see a cup and handle on intraday charts, I have attached a 5 minute chart for RockRose Energy (LON:RRE) over the past 2 days

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psin 13th Feb 246 of 471
1

Reflecting on the "shares, group, market" comment it dawned on me that I had done just that with three of my shares.
That is, JLG, CTO & NMCN - all Construction & Engineering/ Industrials.
Checking through that sector, they are 1, 2 & 3 in the list, particularly when viewing their momentum in the charts.
Lesson learned: check all my researched shares as above.

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zeibots 14th Feb 247 of 471

In reply to post #447178

Yes interesting that all three have by far the strongest numbers in terms of RS, right through - 6m,3M,1m and 1w, in fact the only ones in this sector where they are all positive. Very strong shares in a relatively poor Industrial Group on the same basis.

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zeibots 14th Feb 248 of 471

Sorry for my error, I meant Industrial Group not `sector`. Momentum and RS obviously work together.

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Jcorsellis 14th Feb 249 of 471

Hi Guys,
I was trying to post a print screen of my excel spreadsheet showing my watchlist with 100's of stocks (UK / US) setting up in Volatility Contraction Patterns to share but it won't work! You can see the list by clicking this link that will take you to my investing blog post, it's all free. Trading Watchlist UK / US stocks

Lonmin (LON:LMI) has just broken out

Future (LON:FUTR) is getting there

Spectris (LON:SXS) has just broken out too


Cheers,

Jack

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unwise2 14th Feb 250 of 471
3

In reply to post #447533

Jack,

We have already had this conversation on a thread started by you. You are including VCP's which don't conform to Mark Minervini's guidelines/rules. Have you read his books? I am referring to Lonmin (LON:LMI) and Spectris (LON:SXS). If you own his first book the transition from stage 1 to 2 is listed on page 69.

You are of course free to trade however you want and post whatever you wish but I started this thread to highlight trading that is in line with Marks rules.

In post 226 of this thread I listed the rules Mark never Breaks.

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Jcorsellis 14th Feb 251 of 471
1

In reply to post #447543

unwise2,

A watchlist is just that, a watchlist. You identify stocks that are suitable candidates and watch them potentially develop to trading opportunities. You'll note on Lonmin (LON:LMI) the 50ma is now above the 200ma and previous price and volume action confirms the breakout in my eyes. If you were in at the pivot point you'd be over circa 12% in under 10 trading days, not bad.

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