Trading U.K stock market using Mark Minervini strategy

Friday, Dec 14 2018 by
57

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?


Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way

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.


Do you like this Post?
Yes
No
59 thumbs up
2 thumbs down
Share this post with friends




735 Posts on this Thread show/hide all

unwise2 7th Feb 216 of 735
3

In reply to post #444838

5c5c38547e0afChart-creightons-712019.png

This is an example of how to work out a VCP from a candle or bar chart, Creightons (LON:CRL) has gone through several contractions since the end of June and is currently under 10% price volatility.

Please note I am not recommending it as a buy, it's going to issue a trading update soon which could easily cause it to gap up or down substantially and it has a very wide bid/offer spread.

| Link | Share | 1 reply
herbie47 7th Feb 217 of 735

In reply to post #445048

Howard, thanks for that, I have held Bioventix (LON:BVXP) for about 4 years, it is not one to trade frequently as the spread can be very wide. Churchill China (LON:CHH) spread is over 5%, shares have fallen back about 15% recently.
I also hold TNOM since Oct 2018, came up on my MM screen. MIPS is another one that qualified recently and I hold. Orexo also does, I'm considering at the moment.

| Link | Share | 1 reply
HumourMe 7th Feb 218 of 735

In reply to post #445103

Is there a trick to getting the measure to persist or have you manually labelled them up?

| Link | Share | 1 reply
unwise2 7th Feb 219 of 735

In reply to post #445118

The diagonal lines and the % are manually added, however once its done it stays there unless you delete it.

| Link | Share
Dennis Ayling 7th Feb 220 of 735

Unwise2, thanks for the example of how you calculate a VCP & label it up on your chart. I find the start / end (& hence the high & low) for each contraction is not always obvious on the chart & therefore calculating the volatility percentage can be subjective (like a lot of things in T/A).

This is why I was experimenting with the Average True Range (ATR) indicator using various time periods however this does not give the results I was expecting. I also wanted to use an indicator so that I could program a scan to search for such conditions. I will update if I find something that works, otherwise I'll be doing somethimg similar to what you are doing.

Dennis.

| Link | Share | 1 reply
Howard Adams 7th Feb 221 of 735

In reply to post #445108

Hi Herbie

Thanks for the ideas I'll take a look.

Regards
Howard

| Link | Share
unwise2 8th Feb 222 of 735
1

In reply to post #445183

5c5d4fe2de01aChart-kin-and-carta-812019.

Dennis

Not all VCP's are a classic base shrinking in depth on the right hand side, some can be flat bases that are several weeks long, I have attached an example from Mar/Apr 2018, I actually traded this as it broke out.

| Link | Share | 1 reply
Glorenfeld 8th Feb 223 of 735

Is Beeks Financial Cloud (LON:BKS) possibly setting up a cup-with-handle? The cup would be around 20 weeks long with the top starting in Sep 18. Best seen on a weekly chart.

| Link | Share | 1 reply
unwise2 8th Feb 224 of 735

In reply to post #445403

To me Beeks Financial Cloud (LON:BKS) looked like it was setting up a low handle from 22.1.19 until it fell below 118p on 06.02.19. The current contraction is now 130-110p which is too deep for me.

| Link | Share | 1 reply
herbie47 8th Feb 225 of 735

In reply to post #445418

Bioventix (LON:BVXP) a potential cup-with-handle? Others; Ab Dynamics (LON:ABDP),  Burford Capital (LON:BUR), Bovis Homes (LON:BVS), EKF Diagnostics Holdings (LON:EKF), Fevertree Drinks (LON:FEVR), H & T (LON:HAT), Hastings Group (LON:HSTG), Kainos (LON:KNOS), Macfarlane (LON:MACF), Persimmon (LON:PSN), Sanderson (LON:SND), Scisys (LON:SSY), Somero Enterprises Inc (LON:SOM),  SSP (LON:SSPG), Tristel (LON:TSTL), Universe (LON:UNG).

| Link | Share | 1 reply
unwise2 8th Feb 226 of 735
4

In reply to post #445583

Herbie,

I didn't start this thread so people could post lists of stocks for me to past comment on, that could end up taking a lot of time if it snowballed. I have previously mentioned Burford Capital (LON:BUR) and Ab Dynamics (LON:ABDP) on this thread. I will say several of the shares you have mentioned are well below the 200dma and some of them have a downtrending 200dma. Also some of the suggested cups are over 10% deep. I have said some of Mark's rules have wiggle room but some rules he never breaks are:

Don't buy a stock below 200dma

200dma must be trending up for at least a month

Maximum stop 10%

I have never seen a stock put on his watchlist when the 150dma is below 200dma.


Serica Energy (LON:SQZ) is a reminder today that you can have a great setup and the pivot point still fails.

| Link | Share | 3 replies
herbie47 8th Feb 227 of 735

In reply to post #445608

OK, I was just checking as I'm no expert on charts and patterns. I have not seen the 10% rule before on cup and handle, in Minervini's book his examples are over 10% deep?

| Link | Share | 1 reply
unwise2 8th Feb 228 of 735

In reply to post #445618

Over 10% is fine on a cup, but the final contraction, usually called the handle (where you would place a trade) needs to be sub 10%. Can you give an example of an over 10% handle from his books? I can't think of one.

| Link | Share | 1 reply
herbie47 8th Feb 229 of 735

In reply to post #445628

No I meant the cup, I thought that what you were referring to, not the handle.

| Link | Share
Dennis Ayling 8th Feb 230 of 735
1

In reply to post #445383

Unwise2, thanks for the chart of a 'compressed' VCP. Maybe you should change your handle as you clearly do have some wisdom on this subject matter.

I'd just like to say that this is a brilliant thread, everybody willing to share thoughts, ideas etc. for the benefit of all.

My education continues.

D.

| Link | Share
zeibots 10th Feb 231 of 735
1

In reply to post #445608

Yes, this is a brilliant thread with 14,000 hits so far and quite something in a basically fundamentally orientated site like Stocko. We should certainly continue with the MM discipline as you have suggested. Personally, I have now converted our local investment group to the MM approach and we are geared to benefit when the UK market shows signs of more recovery.
I would be interested to meet some of you in person. I live in the New Forest area near Ringwood perhaps some of you are nearby.

| Link | Share
BottleMerchant 11th Feb 232 of 735
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)

| Link | Share | 2 replies
unwise2 11th Feb 233 of 735
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.


 

| Link | Share
herbie47 11th Feb 234 of 735

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.

| Link | Share
zeibots 11th Feb 235 of 735

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.

| Link | Share

Please subscribe to submit a comment





Stock Picking Tutorial Centre



Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis