Trading US stock market using Mark Minervini methods

20th Mar '19 by mrosbiston

62 comments 5543 reads

Thought we could take Unwise2's suggestion to start a US thread.

Have been a number of breakouts in Mar'19 - to name a few, $YETI , $TTD , $STNE

There were also a number of failed breaks in Feb'19, which would often hit a 52-wk high on a break (even if only base 1 or 2) and sharply reverse. MM himself alluded to this, suggested it was mainly retail buying - generally these were smaller names.

US advantages: low spreads, low transaction costs, larger number of names/opportunities
US disadvantages: FX costs, larger number of names/opportunities (makes tracking more difficult)

I have a USD account with Interactive Brokers for my trading (and anything i do in the US is swing trading - and not investing)

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About the Author

Mrosbiston

Premium Member

62 comments

AnonymousUser340823

3rd Jul '20

$DXCM setting up well once good volume hits

Pineapple

10th Jul '20

A little help please: Does anyone know of a broker that will trade US stocks and offers a stop loss facility?

Additionally, I am trying to set up a Mark Minervini esq template on Stockopedia to screen UK stocks, but must confess I am struggling after setting up a trading above 200day ma screen. I am sure some one did one a few years ago but I can't locate it. Can anyone give further guidance please. Thanks

HumourMe

10th Jul '20

Two I know of which allow $ denominated accounts and various stops/limit orders: Saxo, Interactive Brokers

I've used Saxo for UK/European . IB is US based but I have no experience using them. I think both have trials.

Technically screen for:

%50 day < %130 day, %130 < %200 day

% off high > -30

% of low > 40

As you are looking for a consolidation period to trade a 'breakout' or 'cheat' you might want to add these, to try to pick up shares in a range:

% price last week <10

% price last week >-10

% price last month <10

% price last month >-10

Personally I also have spread < 100

Shares this pass this go into a watchlist. Then after review I delete many of them.

Pineapple

10th Jul '20

Thank you for your reply, much appreciated. I shall have another attempt and have a look at the brokers you suggest.

ebooks886

11th Jul '20

Hi, I'm really struggling to find the parameters on the screener as listed above for ensuring that the 50day is above the 130day which is above the 200day. Can anyone help?

HumourMe

11th Jul '20

Here is a link, which should allow you to take a copy and edit. Below is a picture of some that I mentioned. I threw this together and it contains some of the additional criteria that I find useful - however - this is frequently tweaked.

You have to use advanced to compare X against Y. The search box is also of great use. For the averages you have to click on the little blue arrow to move off the default.

Edit: Taking a closer look definitely needs an edit or two but you should get the idea from this. Sorry - in a rush as have been putting off lunch!

Edit2: If the link works it is now cleaned up a bit more. In addition I have country and debt filters. In general I've found that sorting into order by price change, to identify 'tight days', is a good step before, if the chart 'looks right', adding possibles to a shortlist (a substantial part of Wizard attempts to quantify this). Then I look at the stock report - there usually aren't that many to look at by now. Possibly the US will give more. Criteria can also be toggled on/off which is useful for tightening/loosening criteria.

ebooks886

11th Jul '20

thank you so much!

William K

17th Jul '20

PetMed Express (PETS) looks as if it meets the Minervini criteria for entry. (Also looks a bit like a cup and handle.) I'm relatively new to Minervini's approach and would value the opinions of more experienced investors.

dmjram

17th Jul '20

If you measure the last price contraction (intra day high on 9/7 to low on 14/7) from peak to trough it is over 12%. That is too wide for Mark - he requires a low risk entry with a maximum stop of 8%. It would need a further handle contraction lower than 8% to be a candidate.

How to Make Money in Stocks by Bill O'Neill has many examples of cup with handle patterns as well as other base patterns used by both the CAN SLIM (Bill) and SEPA (Mark) methods - there is a great deal of overlap.

greyster

17th Jul '20

I am no expert on MM, but do like to look for some of the patterns referred to. However, I noticed that PETS are announcing Qtr results on Monday 20th, and from memory Mark did not like holding positions (unless good existing profit built up), going into results.

I will have a look Monday afternoon.

Thanks for flagging.

Greyster

William K

17th Jul '20

Many thanks greyster and dmjram. I'll watch PETS a little longer and see what happens on Monday 20th with their results.

William K

4th Aug '20

More advice needed please. At the moment I'm following XPEL which is a small US company ($464 M) that makes paint protection for the automotive industry. It has just emerged explosively from a saucer and handle pattern yesterday to reach a 52 week high. Trading volume twice the daily average. The fundamentals such as revenue and EPS are not quite as MM recommends - probably because of the pandemic - but still not bad and the prospects look good for next year. There is also not much evidence of volatility contraction although there has been some. The Q2 earnings are out on 12th August before the markets open. I took up a small position yesterday. Do other US followers have any opinions on this one?

William K

13th Aug '20

X PEL jumped 32% on 12th August to $28.70 on a. good set of Q2 results, with very strong volume. I think it may have a lot further to go as it is a tiny company by US standards and the automotive industry is entering a growth phase.

Jack Corsellis

13th Aug '20

Keep a close eye on $CGEN

Tightening up nicely under the $17.85 line of least resistance

William K

20th Aug '20

Good call, Jack! CGEN went up to $19.80 yesterday before slipping back to $18.96. Not sure what the catalyst is but it's on the move.

PS ETSY and Garmin seem to be levelling out before another rise and might be worth watching.

Spl183

24th Aug '20

Afternoon All,

MM featured in an "Investing with IBD" Podcast on 13th Aug. About an hour long and very insightful ...he mentions a few US stocks too recently on his radar.

A worthwhile listen if you haven't done so already.

Cheers, spl183

William K

24th Aug '20

Many thanks Spl183. A useful podcast.

MM mentions Qualcomm (QCOM), TMobile (TMUS), DMC Global (BOOM), BSTC, and 3i Verticals (IIIV). He owns BOOM and notes that BSTC is a biotech with earnings - rare for a biotech. Interestingly he seems flexible on his fundamentals (EPS, margin and revenue) for certain types of stock like biotechs and allows himself to be guided by the charts. The podcast is a few days old and he recommends going for IIIV over $25 (it's now at $28 so a 12% jump since the podcast.

Spl183

27th Aug '20

wilkonz
No worries - and thanks for the v helpful content summary.

Does anyone know if MM only trades in stocks or does he also trade U.S. Options ? I ask since the latter is surging, to extent Q2 volumes exceeded US Stock buy/sell activity for first time due to the surge in retail investor activity via likes of Robinhood, etc etc.

Recently started trading US Options myself, via broker, Tasty Works. To date, I am enjoying and my opinion is that, whilst a more complex product to fully understand ( in addition to the Greeks/ various strategies to execute ) definitely a lot less volatile compared to spread bets/CFDs, and in turn, provides opportunities to profit via strategies such as vertical calls/ credit spread movements (i.e. capped premium downside and can play out based on movement over a daily/weekly/monthly timeframe).

I'd be very grateful also for any insights/ experiences of others who have dabbled in U.S. Options (or even European ones via likes of De Giro) ?

Whilst not strictly an MM topic, utilising MM's screens over U.S. Stocks still applies here. Since you can employ daily momo strategies too (with stops, etc). Last stats I seen were that US markets encompassed c 45% of the world markets, whereas UK was c 3% (!).

Thanks in advance for reading !

Cheers, spl183

dmjram

27th Aug '20

Mark doesn't trade options and advises against doing so.

You might find this article on Robinhood and options trading worth a read:
https://www.forbes.com/sites/jeffkauflin/2020/08/19/the-inside-story-of-robinhoods-billionaire-founders-option-kid-cowboys-and-the-wall-street-sharks-that-feed-on-them/?utm_source=pocket-newtab#5222f700268d

A spread bet/CFD will give the same volatility as the equivalent value of stock purchased with the ability to set a guaranteed stop on some platforms. Options will be more volatile with the decaying time premium and jumps when they move into/out of the money.

And of course options will always be taxable - spread bets and stock trading via an ISA/SIPP isn't.

William K

4th Oct '20

Lakeland Industries ($LAKE) is a small protective clothing company (Cap £131 million) with some strong fundamentals (Stock Rank 99, Piotroski 9, rising revenues, rising margins, rising cash flow etc). The Covid pandemic has helped the demand for protective clothing in healthcare, and the surge in US house building will sustain demand for its products. I suspect it's gone under the radar of the large institutions although some hedge funds (e.g. Renaissance Technologies) are interested.

It does not yet meet Mark Minervini's buy criteria but the price is currently rising and - with the eye of faith - one can see its forming a cup and handle in a couple of weeks. Currently, at $21.32 (spread 14 bps so quite liquid) it looks like a safe buy-and-hold for an ISA, but it could rise much higher.

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Trading US stock market using Mark Minervini methods

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Mrosbiston

62 comments

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