Becoming a Better Trader

Three New Research Panels Are Now Live

We added three new side panels to the Momentum Trading Strategy software this week: Historical RS, Institutional Sponsorship, and Surprises & Revisions.

Each panel is designed to provide an additional layer of research beyond the headline earnings, sales, relative strength, and fund ownership numbers you already see in the scanner.

Historical RS

The Relative Strength readings currently displayed in the software show a stock’s performance ending today.

For example, the one-month RS measures relative performance over the month ending today. The three-month RS measures the three months ending today, and the same applies to the one-week, six-month, and one-year readings.

The new Historical RS panel allows you to change the anchor date and see what those readings looked like at an earlier point in time.

For example, you can select one year ago and see what the stock’s one-month, three-month, six-month, and one-year RS readings were as of that date. You could also go back six months and see what the three-month RS looked like at that specific point.

The panel also displays the stock’s Weighted RS score, its Industry Group Blended RS score, and the company’s industry.

Institutional Sponsorship

We already displayed quarterly fund ownership, including the number of funds holding a stock and the quarter-over-quarter percentage change.

That allows you to see whether institutional ownership has been increasing or decreasing over several quarters.

The new Institutional Sponsorship panel takes the research one level deeper by showing the specific institutions involved in the stock.

O’Neil explained that it is not enough to know how many institutions own a company. Investors should also examine which institutions are involved, whether better-performing funds are participating, whether those funds have recently established positions, and whether the overall number of sponsors is increasing.

The panel gives you a clearer view of who is behind the ownership numbers and provides a starting point for evaluating the quality of that sponsorship.

A recognizable fund name does not automatically make the sponsorship high quality, but seeing the specific institutions involved gives you considerably more information than the fund count alone.

Surprises & Revisions

Strong quarterly earnings and sales growth remain the primary fundamental numbers we care about.

However, O’Neil also discussed the value of tracking earnings surprises and changes in analyst estimates as a secondary layer of research.

The new Surprises & Revisions panel displays earnings surprises, sales surprises, estimate revisions, and recent analyst upgrade and downgrade activity.

Some of the market’s strongest growth stocks can repeatedly report results well above expectations while analysts continue raising their future estimates. We saw this in names such as MU and SNDK during their strongest periods of earnings and sales growth.

That combination can help identify a company whose business is improving faster than the market originally expected.

Analyst upgrades and downgrades are also included because an unexpected change in opinion can sometimes act as a short-term news catalyst. However, these ratings should never be treated as standalone buy or sell signals. O’Neil repeatedly warned against blindly following analyst recommendations.

These panels do not replace the primary work of studying the chart, earnings and sales growth, price action, market direction, industry-group leadership, and the primary CAN SLIM criteria.

They simply give you more ways to dig beneath the surface and better understand the companies you are researching.

Stop Waiting for Someone to Hand You the Next Big Winner

If you are struggling to find the big winning stocks, you do not need to wait around for me or anyone else to tell you the names.

Open the Relative Strength Stock Screener and click the Leader / CANSLIM preset stock screen.

You will immediately see many of the market’s strongest names near the top of the list.

As you scroll through the list, some names will be extended. Those go on your watchlist so you can wait for the next proper pullback or setup.

Some will be near pivot points.

Some will already be actionable.

That is the entire point of the screener.

It is not there to overwhelm you with tickers. It is there to help you quickly identify where the real leadership is.

This is the same exact process I have used to find and share many of the biggest winners since January.

Names like:

SNDK

MU

AAOI

AXTI

DELL

CIEN

LITE

WDC

STX

SIMO

and many more!

Your job is to build the habit of checking the list, following the leaders, managing risk, and being ready when the setup appears.

Everything you need to learn the process is inside the Momentum Trading Strategy Course. I also provide a list of books that teach many of the same timeless principles.

Learn the process.

Use the tools.

Trust yourself.

You can do this.

The Multi-Bagger Irony

A lot of stock newsletters sell people on the hope of finding the next multi-bagger.

A 100%, 200%, or 300% winner.

Many talk about holding for years to get the big returns.

What people don't realize is this:

By the time you figure out they were full of it, they already made plenty of money selling you the hope.

The funny thing is, I don't even teach or claim to give people multi-baggers.

But many investors would likely get similar or better results by learning how to identify true growth stock leadership, proper setups, institutional demand, and strong price action.

Here are a few names I mentioned in January and early February:

• AAOI +302%

• AXTI +294%

• SNDK +249%

• DELL +214%

• MU +160%

• LITE +155%

• CIEN +147%

• STRL +127%

• STX +126%

• WDC +124%

• INTC +101%

• AMD +101%

These were discussed in the paid subscriber chat and watchlist posts.

But to be clear, this is not what I do here.

I'm not telling you to blindly buy a stock and hold it until it becomes a multi-bagger.

The goal is to teach you how to find leadership, manage risk, identify proper entries, and build a repeatable process.

Copying Traders Won’t Make You Rich. Learning the Way Might.

At this point in my trading, I don’t pay attention to what anyone else is doing.

But recently, I looked around and noticed something interesting.

Some of the traders I learned from, including Dan Zanger, recently were buying many of the same names, around the same areas, using the same types of setups I was seeing.

Names like: SNDK, DELL, MU, LITE

Why?

Because we learned from the same source material.

The same books. The same legends. The same principles. The same market truths.

When you truly learn a strategy, your decisions start to look similar to others who have learned the same way.

To outsiders, it can look like people are copying each other.

But that is not what is happening.

Will you be one of the few who carries the torch forward?

The traders who actually learn the process, study the patterns, understand the risk, and develop their own conviction are the ones who carry the torch forward.

That is how great trading knowledge gets passed down from one generation to the next.

Will you be one that carries the torch forward?