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

sharesurfer

24th May '19

T Clarke (LON:CTO) broke out today on strong volume. Completion of cup and handle and a pivot point today. Up 6.5%. Also underpinned by a low valuation (though cyclical so that accounts for some of it). Will probably buy some on Monday.

Rusty2

25th May '19

No you won’t, it’s a bank holiday.

andrea34

25th May '19

I am holder of Pagegroup (LON:PAGE) (for a while) and I am encouraged by both the recent trading update but also the chart, which is flagged as a Golden Cross although recent momentum (mostly due to Trump's latest spat) softened with the market:

This prompted me to also look at RWA, which has been a strong overall performer for some time:

Robert Walters (LON:RWA) has also seen the 50MVA move through the 200MVA, though the difference of late is that there doesn't seem much softness and the volume is increasing whereas with Pagegroup (LON:PAGE) it is decreasing.

(p.s. I will admit that I am new to charting, and I struggle to see particular shapes signalling up/downtrends)

HumourMe

25th May '19

(p.s. I will admit that I am new to charting, and I struggle to see particular shapes signalling up/downtrends)

This site is a useful resource:

http://thepatternsite.com/Blog.html

http://thepatternsite.com/studies.html

By useful, I mean that Bulkowski attempts to systematise the use of trend and price patterns. I first bought one of his books in 2000 (Encyclopedia of chart patterns v1) ,but was too wedded to a pure Fundamental approach at the time, with a lack of charting ability, to make any use of it. After recently sorting out the shed and rediscovering my old TA books, boxed during a house move around 2007, I decided to update any thinking and bought Getting Started in Chart Patterns which is an affordable introduction. Also good for insomnia. If you can get price data, he also offers free pattern recognition software. I've managed to get this working but not fully evaluated it yet.

However, my main point is that I too have difficulty seeing some patterns until after the event. I am half convinced they are in the eye of the beholder, but despite that, actually 'work' by systematising the use of targets and stops (and Risk/Reward) based on recent volatility and trend.

psin

27th May '19

There seems to a complete lack of MM opportunities at the moment. Although I hold the likes of AUTO, CTO and MANO, I can find no other shares that are getting close to Minervini's strategy. A number of shares are in recovery mode, but none appear to stage 2 along with the fundamentals required to tick all of the boxes. A few I have missed (e.g. FUTR) May be this is a sign of the times? "Sell in May etc etc" I am holding about 50% cash at the moment. Think I'll just sit on the sidelines, watch and wait for the time being. Thoughts on the lack of MM opportunities would be most welcome.

unwise2

27th May '19

It has been a very frustrating 12 months for anyone following MM's methods. There have been some successes but also plenty of failures. Mark has been finding it tough going as well, he mentioned last week that he is down 3% in 2019. The worst market to trade breakouts is a volatile sideways one which is what we have been in for sometime. Keeping overall exposure small until you start getting gains is crucial to avoid death by a thousand paper cuts.

chillyhill1

27th May '19

Is Impax Asset Management about to BO. Volume dropping and tight range 20,50, 200 moving averages looking tight and nice VCP pattern

llwydiaid

28th May '19

Re Impax Asset Management (LON:IPX). Looks promising but be careful, it has a spread of around 5% and results next week.

Rusty2

28th May '19

Any views on Kainos (LON:KNOS), good Preliminary Results today.

dmjram

28th May '19

"spread of around 5%"

That is the problem with much of the UK market outside of the FTSE350 when trying to apply CAN-SLIM/Mark's approach - the spreads make risk management via tight stops near impossible to apply regardless of whether the market is offering good set ups.

psin

28th May '19

IPX looks like it's at stage 3 to me. Also a big pull back today from earlier gains. I wouldn't buy with that kind of spread and with results next week, I think I'll hold on to my cash. Kainos looks nice, but the big drop in margin would be a real concern for me. (I haven't read the commentary, so there may be reason for this)

nicobos

28th May '19

Kainos (LON:KNOS) looked good but pinbar today made me weary to take a position at close. I like a stock to close strongly on the daily as much better odds of follow through.

Bidstack (LON:BIDS) held it’s breakout and pushed up strongly again. One to take some quick profits on or have a suitably small position size to withstand the volatility.

Pets at Home (LON:PETS) has held its breakout and followed through nicely on volume - takeover rumours and shorts closing out may have helped !

A.G.Barr (LON:BAG) also held its breakout and shown some nice tennis ball action today.

Luceco (LON:LUCE) nice trend and firm after last weeks gap up.

BigDish (LON:DISH) broken out of bowl but looks extended.

sharesurfer

28th May '19

You’re absolutely right :-)

Actually don’t know what to make of it. Fell almost 4% on good volume so not a low volume pullback which is what I’d have liked to have seen. Guess I’ll just have to keep hold of the cash :-)

Gromley

28th May '19

A.G.Barr (LON:BAG) also held its breakout and shown some nice tennis ball action today.

Whilst I kinda get what you are saying, I really have no idea what that actually means ;-)

Which pretty much sums up my rationale for holding A.G.Barr (LON:BAG) ; I Originally bought on (somewhat tenuous) valuation grounds and were it not for my growing interest in momentum strategies I would have sold long since; it is after-all now grossly overvalued by any metric a value investor would entertain.

Nevertheless, Stocko ranks it as a "high flyer" (the market loves it and shows no signs of applying boring old value metrics) - maybe the hidden value is that the East of globe will become as attached to the Irn-Bru brand as some of the UK?

I am mystified personally, but I suspect this may be one to continue to hold for as long as it continues to go up.

nicobos

29th May '19

A.G.Barr (LON:BAG) started going down rapidly mid session but bounced back strongly to close green (sorry, tennis ball action is a MM reference!). Check out the volume - it looks massive. Is something brewing - takeover perhaps ? Or as you say, is Irn-bru the next fevertree destined for global domination !?

Agree that holding on fundamental grounds now would have you sell but yes, will ride the momentum whilst it’s there.

Volex (LON:VLX) forming a VCP formation and almost a break out? Although results are soon so trade with caution.

peterclothier

29th May '19

GB (LON:GBG) I've been watching this develop too. Results are due on 5th June. For O'Neil, I'm not sure the 150SMA below the 200SMA would prohibit the set-up from being valid. It has volume and dry up in volume in the right places too, with RS in a sliding market at the moment

Spl183

29th May '19

Something is brewing ... IRN BRU’ing that is. They are to formally launch an IRN-BRU energy drink range on 1st July ... perhaps something to do with this ? Expected to be popular amongst their younger market demographic against backdrop of a growing market for caffeinated energy soft drinks.

unwise2

29th May '19

Some of the companies you mention had a final contraction greater than 10%, are you trading with stops larger than 10%?

nicobos

29th May '19

I find it difficult in the UK market to stick exactly to MM's rules and find enough setups. Auto Trader (LON:AUTO) was the last classic setup which showed good VCP characteristics, tightened up on the right hand side before breakout with a drying up of volume and a nice clean breakout. Easy to set a c.6% stop here for a good risk / reward trade.

Sometimes this isn't possible so I'll either try and put the stop under the last obvious support level and sometimes this is >10%, or will adjust R:R accordingly and take a much smaller position, or pass on the trade.

If I take a wider stop and the stock shows weakness after the breakout point, I'll usually sell half before the stop. The best set-ups seem to work straight out of the box!

Whilst I've learnt a lot from MM, I don't profess to be an expert. There are many ways to skin a cat and I'm just trying to do more of what works and less of what doesn't !

unwise2

29th May '19

5cee50cd9d189Chart-moneysupermarket-com-

Thanks for replying, agree MM setups have been thin on the ground lately, sticking to 10% or less technical stops has required a lot of patience.

Another large cap looks like it is setting up a sub 10% handle: Moneysupermarket.Com (LON:MONY)

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Trading U.K stock market using Mark Minervini strategy

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Unwise2

1516 comments

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