Trading U.K stock market using Mark Minervini strategy

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14th Dec '18 by unwise2

1516 comments 108971 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

peterclothier

29th May '19

@Nicobos I agree completely, finding stocks that fit the MM/Canslim setups in the UK that are:

1.liquid
2.with a sensible spread
3. Are growth companies and not in oil/mining

narrows the field of potential candidates too much, and results in the temptation to fudge the criteria.

I have focused more on the US recently, and have found the time zone difference actually an advantage, as I can spend the morning researching and screening outside market hours.

unwise2

29th May '19

I agree completely, finding stocks that fit the MM/Canslim setups in the UK that are:

1.liquid
2.with a sensible spread
3. Are growth companies and not in oil/mining

narrows the field of potential candidates too much

I don't find 3 much of a problem, however 1 and 2 definitely are, particularly in the past few months. For example I really liked the look of UP Global Sourcing Holdings (LON:UPGS) back in March-April but the bid/offer was 60/64p.

FREng

30th May '19

BigDish (LON:DISH) keeps going and Paul Scott says in today's SCVR comments that he has bought.

Ken Lowes

31st May '19

There is a MM Trend Template on Sharepad which is showing 75 qualifiers, 13 of which might be worth looking at, and in my opinion the following are worthy of serious consideration. ABDP CHH TUNE FUTR KNOS KEYS TMMG. Personally the only one I would invest in is ABDP, but I won’t be doing that because one of the first rules of Minervini is “ is the market healthy?” If not save your money for when it is. The last part is my interpretation. In my opinion this bear market is still in play, but you are probably getting bored with me saying that.

unwise2

31st May '19

Most of those stocks are currently extended. I recently owned ABDP when it broke out of its base and I currently own TMMG from around 66p.

nicobos

4th Jun '19

T Clarke (LON:CTO) dropped heavily earlier (not sure why?!) - looks like a shake out triggering some stops as seems to be bouncing strongly. Volume is higher than normal but if it looks like a pinbar at close, could be a good entry point with the weaker hands already shaken out.

Part of the problem of trying to follow a strict MM strategy in small caps - doesn't take much volume to engineer a fall and get shaken out of your position. Safer to use close of daily bars but then stop can be too wide.

DX (Group) (LON:DX.) I like the look of...turnaround seems to be going well (results were last week) and on a nice stage 2 run with clear levels and well off lows. Could be time to take a position?

Wey Education (LON:WEY) acting strongly if it can get above the 200 day and consolidate, could be worth watching.

Bidstack (LON:BIDS) breaking out again ... will see if holds at end of day. 30 is a key number to break so could keep moving upwards if can hold above this level.

BigDish (LON:DISH) went mental after first mentioned above (thanks to Paul Scott no doubt!) but very extended and forming a double top so will likely pull back. No position.

Luceco (LON:LUCE) holding up well after gap up along with Pets at Home (LON:PETS).

Kainos (LON:KNOS) bounced nicely and seems to have some strength behind it... may wait for a pull back to see if I can get a low risk entry.

I see Mission Marketing (LON:TMMG) has broken trend today and will bounce a few out with tight stops.

llwydiaid

9th Jun '19

Mark Minervini's Twitter comment on Friday:

"The market is in the process of setting up the best buying opportunity since Nov. 2016. There's still some work to be done, but you must be prepared so you are ready when opportunity strikes."

Is it the same here??

Benson212

9th Jun '19

The NASDAQ Composite had a Follow-Through day on Friday, which is a signal the market has bottomed and a new rally is set to begin. This is defined as a major index increasing at least 1.4% with greater volume than the day before. It's measured from the when the market makes a new low and the follow through day should happen between 3 and 7 days thereafter.

It's important to note that although a stock market rally has never started without a follow through day, not all follow through days lead to a new market rally. As we all know, the best buying opportunities follow a market correction.

However, when looking at the major UK indices, we are yet to endure a follow through day. So in the short term, trend followers should be cautious. Until a follow through day materialises, then I wouldn't get aggressive.

Furthermore, a good sign of market health is when institutions invest in "riskier" assets (e.g. small/micro caps). When you look at the AIM All Share and FTSE Small cap index, they are very much in a downtrend, below their down-trending 200DMA.

At the end of the day, we don't know whether an excellent buying opportunity is around the corner for UK shares, but broad market participation is needed, especially in smaller names for this to happen.

However, this should be used as a secondary indicator and the focus should always be on individual names.

unwise2

10th Jun '19

5cfe0e57ce0ceChart-ftse-aim-all-share-in

I agree with everything BH1991 has said. I like to use the Aim All share to get a feel of the U.K market since it is the broadest index. When the market sets up a great buying opportunity it looks similar to a stock setting up. Back at the end of 2016 AXX set up a VCP and then went from 830 to 995 with very little volatility which is great for traders using stops. Compare the chart attached to the current one.

Just because the market hasn't set up yet doesn't mean you shouldn't buy anything, you just have to be careful as volatility it going to be greater.

maffs0

10th Jun '19

I have been looking recently at Boohoo (LON:BOO) which seem to be tightening up nicely. If you look at the 2 or 5 year weekly chart, it looks like a nice cup with handle. It is emerging from a very long base and it continues to have good growth figures going forward.

My trading plan is to buy a 1/4 position at 235, another 1/4 at 245 and a final 1/2 if it breaks out at 250.

M.

llwydiaid

11th Jun '19

Re FTSE AllShare Index. The Fibonacci retracement levels seem to be working here - it bounced off the 61.8%, rebounded and tested the 50% and is now around the 38.2%, hopefully on it's way back to the top.

pgs501

11th Jun '19

Hi all,

Apologies if this has been talked about before but MPAC (LON:MPAC) appears to be setting up nicely. Given this looks to be a turnaround situation we can largely ignore the 200p+ sp 12 months ago but following their fall last summer the sp has had 4 breaks during a generally increasing price. It really looks like a stage 2 from the start of the year.

1st 19 Sep - 26 Oct it dropped back 24.5%
2nd 8 Nov - 1 Jan it dropped back 26.1%
3rd 6 Mar - 30 Apr it dropped back 15.2%
4th 13 May - 10 June it dropped back 8.8%

Looking at the volume during the past year you have had very high volume green days followed by low volume reds making the sp drift down.

Today it is rising nicely due to a very positive update on its pension liability (incidentally this could be a nice read across to other big deficit co's). Without this pension issue, this company is very cheap on a fundamental basis (e.g. P/E is 7.3, P/B is 0.8) but had previously always been held back by the huge pension liability.

I am definitely no expert in MM but it seems to be ticking a lot of boxes to me. Personally, I would want to see the sp get above the 177p high but at that point, it will look really good. With that in mind, I have taken a small position today.

Am I missing something important?

unwise2

11th Jun '19

4th 13 May - 10 June it dropped back 8.8%

Looking at the chart it looks like MPAC (LON:MPAC) dropped 13%.

pgs501

11th Jun '19

Ah sorry unwise I had been using simple day ends rather than high & low points within the day. The day ends gave a drop from 177 to 161.5.

As an aside what is the filter you have included for the intraday high/low bars?

Thanks, Pete

nicobos

11th Jun '19

Thanks Unwise - Moneysupermarket.Com (LON:MONY) has broken out nicely from its long base so taken a position.

unwise2

12th Jun '19

As an aside what is the filter you have included for the intraday high/low bars?

I'm not sure what you are asking, my charts are just standard candles which show open/high/low/close. The black lines have been added manually.

peterclothier

12th Jun '19

@ maffs0 Boohoo (LON:BOO) looking good after results dip appears to have been bought.

dotDigital (LON:DOTD) looks like it is going to make a closing high today after 18 months of sideways

Mechanical Bull

12th Jun '19

One thing missing is the lack of institutional buying. According to MM this is usually needed to sustain a share price above the new high.

unwise2

13th Jun '19

dotDigital (LON:DOTD) looks like a great VCP, because of where the moving averages were earlier this week my screeners missed it. It has now moved away from the pivot point of 102/103p so I'm not going to buy any.

llwydiaid

13th Jun '19

IG Design (LON:IGR) weekly chart over the past 4 years. Large volume coming in today following Tuesday's results.

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Trading U.K stock market using Mark Minervini strategy

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Unwise2

1516 comments

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