rachel fox: short-term trading tips and strategies with chaikin analytics

Great Summer Stock PlaysFinding Short-Term Performers with Chaikin

Analytics

Rachel Fox - creator FoxOnStocks.com

Eric Chaikin - Chaikin Analytics

June 24, 2014© 2014 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.

Welcome

Chaikin Analytics for Desktop2

© 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and Confidential.

What We’ll Cover

(Intros…)

1.What is the Chaikin approach?

2. How do I use Chaikin to find winning trades?

3.Specific Buy and Sell Patterns

4.Special Offer & Opportunity

5.Q&A3


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Challenge: Information Overload

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Solution

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4© 2013 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.

The Solution: Chaikin Analytics

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Chaikin Power GaugeClear summary of a stock's potential – with a record of success

• Financials

• Earnings

• Technicals

• Experts

Improves your trading batting average!


Chaikin Power GaugeClear summary of a stock's potential – with a record of success

• Financials

• Earnings

• Technicals

• Experts

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©© 20132013 ChaikinChaikin AnalyticsAnalytics LLC.LLC. AllAll RightsRights Reserved.Reserved. PrProprietaryoprietary andand Confidential.Confidential.

What is the Chaikin Power Gauge?

• Very Bullish-to-Very Bearish rating

• Indicates likely relative performance over 1-to-6 months

• 20-factor quantitative model looks at:

Financials, Earnings, Technicals, Experts

• Covers 5,000 U.S. equities

• 12 years backtesting, 3 years real-world performance


A reliable indication of a stock’s potential, with a history of success

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Power Gauge PerformanceRussell 3000 - Large, Mid, & Small Cap stocks

Annualized return by Rating group vs. benchmarks. Note: Test results are equal weighted; R3000 and SPDR ETF are cap-weighted.

Very Bullish stocks are highly likely to outperform index benchmarks.

Results thru Q1 2014


Period Dates Very Bullish stocks

Russell 3000ETF

SP500SPDR ETF

All Real-World Performance

Jan ’11 -Mar ‘14

+20.70%annual return

14.99% 15.01%

Last 12 Months Apr ‘13 -Mar ‘14


22.93% 22.21%

Year 2013 Jan ‘13 -Dec ‘13


32.83% 32.13%

Life-To-Date(includes test period)

Jan ‘99 -Mar ‘14


5.07% 4.64%

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Play Offense Well: What to buy

• Power Gauge Rating Bullish

• Price Trend Up

• Relative Performance Strong

• Chaikin Money Flow Strong

• Buy Signal in Chaikin Analytics

What to Buy: Classic Bulls

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Play Good DefenseTurn Land Mines into Gold

Mines

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• Power Gauge Rating Bearish

• Price Trend Down

• Relative Performance Weak

• Chaikin Money Flow Weak

• Sell Signal in Chaikin Analytics

What to Sell: Classic Bears

Why I Love Chaikin Analytics

• Can be added to any trading process

• IS the missing puzzle piece of confirma: on

• Fits all styles: Growth, Value, Momentum, Long Term, Short Term

• Fits all levels: Beginners, Intermediates, Pro Traders

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Rachel’s 4-Step Process

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1. Find Strong Stocks in Strong Groups

2. Confirm Fundamentals & Technicals

3. Find the Carrots! (Buy/Sell Signals)

4. Identify Technical Patterns

My Process: Step 1

• Find heavily saturated industries:

Highly bullish

• Select based on likely market direc: on over next (1 2‐ weeks)

Highly bearish

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Loop through:

Very Bullish stocks in strong industries (Longs)

& Very Bearish stocks in weak industries

(Shorts):

Do the fundamentals confirm the technical trends?

• Chaikin Analytics - great for finding strong fundamentals;

it incorporates predictive factors:

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• Analyst Estimate Revisions, Short Interest, Insider Activity

• Confirm Chart Technicals:• Strong Chaikin Money Flow (accumulation), Strong Relative Strength, OB/OS

My Process - Step 2

My Process: Step 3

• Find the CARROT

• Of “Very Bullish” or “Very Bearish” stocks find Buy/ Sell signals

That’s the Buy/Sell TODAY indicator. Gives me lower risk entry/exit point.

• Tells me when something it hot and ready to pop.• Perfect for the short term.

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Step 3: Buy/Sell Signals

Focus on 2 types:1. Overbought/Oversold Buys & Sells2. Relative Strength Buys & Sells

Overbought Sell – Finds Bearish stocks which are overextended

rela: ve to their recent short‐term trading range.

Oversold Buy – Finds Bullish stocks which have become Oversold rela: ve to their short‐term trading range.

Rela<ve Strength Sell – Measures the stock’s performance rela: ve to the market as a whole. If the price has a risen but not as much as market, Chaikin will give a sell signal.

Rela<ve Strength Buy ‐ Measures the stocks price rela: ve to the market as a whole. If the price has fallen but not as much as market, Chaikin will give a buy signal

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Step 4: Identify Patterns

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Technical Patterns1. Consolidations2. Reversals3. Continuations

Look for these in another intraday trading system ‐ complementary to Chaikin

If the stock has been bullish for a while & Chaikin’s system shows there is a buying signal BUT there is a technical consolida: on pa\ ern forming, I’ll wait to see if the stocks next technical pa\ ern breaks higher or lower.

Consolidations

Channel

Symmetrical Triangle

Ascending Triangle Descending Triangle

• If the stock breaks lower out of a consolida: on pa\ ern, my guess would be that a reversal pa\ ern is forming and I would NOT buy the stock. 2

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Continuations

Bullish Pennant

Bullish Flag

Bearish Pennant

Bearish Flag

Wedge

23© 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and

Confidential.

• If the Consolida: on pa\ ern breaks higher, then my guess would be a Con: nua: on pa\ ern is coming next. If I get confirma: on of a Con: nua: on pa\ ern, I’ll move forward and buy the stock.

Chaikin Analytics Demo

Let’s look at the system 2

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Trades I Made with Chaikin

25© 2013 Chaikin Analytics LLC. All Rights Reserved. Proprietary and

Confidential.

EL - Estee Lauder 3/11

(short) SGMA Sigma - 3/13

(long) CKH- Seacor 3/13

(short)

N - NetSuite 4/3 (short) - also just shorted it today!

TFM - The Fresh Market 3/14 (short)

HII - Huntington Int’l - 3/20 (long) - “personality change”

TTM - Tata Motors - 4/30 (long)

rachel fox: short-term trading tips and strategies with chaikin analytics

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