Market is in confirmed uptrend, but the days of high volume selling has gone down by 1 to 5. (once it reaches 6-8, the market has hit the top for now)
Market sentiment indicators are also approaching great bullish optimism
The Delta MSI (DMSI)measures the position of ~3,600 stocks relative to an intermediate-term moving average crossover (MAC) point. When greater than 50% of the stocks followed are above this MAC point, the market is bullish and equities are attractive. When the indicator is below 50%, risk is elevated and stock exposures should be reduced
Current Sentiment Last Week 2 Weeks Ago 3 Weeks Ago
BULLISH 61.6% 67.0% 73.9%
Now Lets look at Valeant Pharmaceuticals (VRX)
Key characteristics : Number 28 on the top 50 stocks of the entire market. 99 Composite Rating (top 1% of all stocks), EPS rating of 96, Relative Strength Line rating of 88, accumulation by market (people are buying it) is B- . It is also a sector leader ((sector leaders are the greatest performers often having 1-2 years of heavy stock price growth)) in Medical Stocks – which is very good (top horse) Out of 197 industry groups (we want to invest only in the top 40 industry groups in the entire market and in the top 6 broad sectors out of 33 sectors based on price performance). VRX belongs to the industry group of the medical-ethical drugs group (42 stocks) , this industry group is ranked at number 8. VRX is the sector leader in Medical . Medical Sector is the currently at 10 rank.
Always, always, without fail cut your losses (5%-8% of your purchase price : Remember it is easier to make up for the loss with a gain of 100% or more for winners, and it is easy. Preserve your capital at all costs, so when those winning stocks come along the way you are ready to play. Opportunities are like train stations in Tokyo, one goes and the other comes. Have the cash to buy the ticket and be on the platform and ride any train that you are comfortable with. Let the chart speak to you: trade what you see and not what you think)