Trading U.K stock market using Mark Minervini strategy

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14th Dec '18 by unwise2

1516 comments 109004 reads

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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About the Author

Unwise2

Premium Member

1516 comments

unwise2

25th Feb '19

There seems to be more "splat egg" than "tennis ball" action at present.

Very true. Did you buy HLMA at the cheat pivot around 1428p?

llwydiaid

25th Feb '19

Excellent thread, I've been an MM fan for the past couple of years. My best recent trade was MCRO which probably didn't meet all of the criteria but there was a recent cup and handle and a large gap to fill from 12 months ago (I've just sold for 20%). I was caught out by the "splat egg" in BUR but I'm in HLMA at 1452 with fingers crossed.

ricky65

25th Feb '19

Are you trading the U.K or internationally?
90%+ US stocks since Oct 2018. I'm keeping my UK stock exposure light until the Brexit uncertainty is resolved.

I would love to be buying companies in the £50-500M range with large EPS growth forecast but there are very few setting up buy points.

UK Small Cap growth is my hunting ground too. Since the Oct 2018 sell-off I haven't seen many setups either. In comparison, there are a lot more US Small and Mid Cap stocks that meet my criteria.

unwise2

26th Feb '19

5c75007c73ff4Chart-manolete-partners-261

The only setup to make big gains recently was a IPO base that I dismissed because it had terrible liquidity, some days it traded less than £1000! It was a mistake because when it broke out (day 25) volume jumped dramatically. Since the breakout Manolete Partners (LON:MANO) gained 75%. Stocko has no forecasts for EPS.

Glorenfeld

26th Feb '19

Currently looking at Beeks Financial Cloud (LON:BKS). I see a possible cup-with-handle from September to today. Volume dried up nicely during cup and is picking up a little now, though the handle is a little too deep. Other confounding factor is that it's interim results day tomorrow.

dmjram

26th Feb '19

Yes, my buy point was as it went through the 1427 level it had been meeting supply at consistently.

stock_Hunter

26th Feb '19

TATE(703) correction looks deep....Any stop loss level advisable?

dmjram

26th Feb '19

Do you mean you got in at 703? If so I guess on 11/2.
If so, the technical stop on that entry looks to me like 662 which puts c6% at risk.

Now it looks like TATE is pulling back in after breaking out from a short handle and need to see if it can bounce back or goes splat. At present it seems likely we'll have 2 lower lows by the close today and the volume was quite high yesterday so would look at applying the violation rules found in Mark's 2nd book - 3 lower lows on volume, up:down days, close below 20/50 MA etc. to see if you want to reduce or exit before the initial stop gets hit.

That's what I'd be looking to do with TATE, though as Mark says it's an art not a science and a lot depends on your own risk tolerance and trade management approach.

unwise2

26th Feb '19

We all have different tolerance of risk, looking at the Tate & Lyle (LON:TATE) chart the logical place to put a stop (assuming purchase was around 723p) would have been either 700p, 662p or 654p. Staggered stops are also a possibility, sell half at 700p and half at 662p. It's up to you how much you are prepared to risk.

ricky65

26th Feb '19

Manolete Partners (LON:MANO) looks like a textbook IPO breakout. One of my favourite setups as they can make big moves in a short period of time. Passed me by sadly!

The low liquidity doesn't bother me. As Minervini says, we want to see a dry up in volume before the breakout. Anyway, looks very extended now!

ricky65

26th Feb '19

I agree Beeks Financial Cloud (LON:BKS) has potential here. It's a little fast through the right-hand side but it doesn't concern me. Looks like 6 up days in a row with volume increasing. Suggests to me expectations are high for tomorrow's results. Most likely success of the pattern will come down to results reaction.

Glorenfeld

27th Feb '19

Beeks Financial Cloud (LON:BKS) Think we have our answer from an MM point of view.

That said, in complete contradiction to MM's method, I've topped up at around 107 as I still think there's future value at this level and I'm happy to wait and see the final results.

ricky65

27th Feb '19

Yes, the market's verdict is in and Beeks Financial Cloud (LON:BKS) -12.5% as of writing. I'd say it significantly reduces the odds of this consolidation breaking to the upside. I'd want to see the 150 MA hold here. If it breaks the 200 MA that wouldn't be good at all. I wouldn't be buying here as I'm a stickler for MM's rules. Good luck with it!

A good example of why I no longer buy a stock just before earnings or a scheduled trading update. Always trust a bit to luck and the gap down risk adds downside volatility I want to avoid.

Glorenfeld

27th Feb '19

"I wouldn't be buying here as I'm a stickler for MM's rules"

A policy clearly vindicated in this case :)

Rusty2

28th Feb '19

But can work both ways, I bought TTD (Trade Desk) on day before 4Q results as fell 8% on broker downgrade, after results shares went up over 30% in a day, then I sold. Broker downgrade create buying opportunities in decent shares but is probably against Minervini strategy.

Some comments about Burford Capital (LON:BUR) above, nearly always go up on results as forecasts have always been beaten or smashed, I'm a long term holder.

I agree not many opportunities in the UK market and most are in mining/oil sector which is not an area I usually invest in. The US is still throwing more shares, I'm considering YETI which is a fairly recent IPO and CISCO.

unwise2

28th Feb '19

Does anyone know where I can find a list of de-listed companies in the past 5 years? I want to look back at the price action of all companies (£20m MCap+) on the LSE over the past 5 years including any that have be taken over. I can think of a few from memory but would like a comprehensive list.

Glorenfeld

1st Mar '19

Trans-Siberian Gold (LON:TSG) coming out of a nice tight base? Fundamental characteristics also look good to me.

unwise2

1st Mar '19

That's a tricky one, what you are refering to is a 3 week long handle in a 2 year long base. Its shot up from 30-35p fairly quickly and the Bid-Offer is 45-50. Small trades today appear to be 47.5p-49.2p a spread of approx 3.5%.

Glorenfeld

1st Mar '19

Interesting. I was looking at it as a 3 week long first base in a new stage 2, but I see your point.

dmjram

1st Mar '19

You can find the AiM companies that have de-listed here:
https://www.londonstockexchange.com/statistics/markets/aim/aim.htm
The stats are month by month.
Not aware of a source for the main exchange

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Trading U.K stock market using Mark Minervini strategy

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Unwise2

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