How Do You Buy And Sell
OK, its Friday and I'm screwing around. So what I would like to know is for those of you who run discretionary accounts, how do you determine when to buy and when to sell a stock. Is there anyone who uses confluence, candle stixs, swing points, volume indicators, etc? Anyone only use fundamentals?
We employ technical analysis in deciding when to buy/sell a position in conjunction with fundamentals.
Double bottoms (BUY if fundamentals justify "the worst is over") and triple tops (SELL if fundamentals justify "it can't get any better than this").
I do no charting. We run quant screens based on a pile of date
depending on the strategy: Dividends, Dividend Growth, free cash
flow, P/E, debt to equity, ROE, EPS, EPS growth, EPS surprises, Sales,
Sales vs averages, etc...
We have research alerts on all of the companies, and specific sell
criteria...so when a trigger comes through (say a dividend reduction)
we are notified and we decide what to do.
We run the lists and use them to decide what to replace when something
is sold. We follow sector weightings of our firms research, use
outside research for opinions, and scour money managers and mutual
funds to see what they are loading up on or selling off.
I won't lie, I'm envious of those who actually manage money. I'm curious, do most firms require that you have the CFA designation to do what you're doing?
I use swizzle sticks. Very helpful technique.
Ok sorry for the smart answer. I am an avid user of Point and Figure charting from Dorsey Wright and it has served me well. I screen for fundamentally solid stocks and then primarily use the chart patterns and relative strength to determine which ones to buy and at which price.
I sell when major support levels are broken, or if the stock becomes too extended to the upside. Usually on the upper end of things I start by selling a partial position, but when stop losses are hit I sell the whole thing.
I primarily use S&P for my fundamental research because it is unbiased, succint, and they have a generally good track record.
Occasionally I will deviate from my technical discipline when I have a deeply held belief that a 'special situation' is way out of favor and deeply oversold. I try to only do this on the rare occasion when I have strong convictions and it usually works. Examples would be recent purchases of MSFT and PFE in the low 20's. In the interest of full disclosure, however, I did pick up partial positions on PFE earlier on at the 27-28 level.
Buying after break outs. Momentum all the way. Stop losses on the way out. Tracking 10.66% for the year (had a bad summer), basically inline with s&P 500 but with 25% still in cash.