Keep an eye open for CELG

The market marched up today. the distribution days are 7 for s&p and 5 for NASDAQ (a distribution day is when there is high volume selling, higher the count greater the chance that the market would get into correction).

The Delta MSI is also bullish. It 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 68.2% 69.2% 66.3%

Now Lets look at Celgene Corporation (CELG)

Key characteristics : This is NOT the top 50 stock (it was in June of 2013). But it is has just yesterday popped from a base, and has made a new high.

Any financial entity making new highs continue to make new highs, like wise a financial entity making new lows will continue to make new lows.

Its Earnings per Share rating is 98 (top 2%). It is in medical sector – Sector rank 6. and Industry group rank of 39.

celg

happy trading

 

 

 

2 thoughts on “Keep an eye open for CELG

  1. Interesting article. I am still learning about these types of indicators, and I haven’t heard of these before. An observation I would have regarding the Delta MSI, however, you are saying you should reduce your stock exposure if the indicator is below 50%, doesn’t this imply you are selling low?

  2. Hi Creativelypaid
    thanks for your comment.
    Before i answer your question, i would like to give some back ground.
    There are basically two types of philosophies in buying and selling stocks. One is Fundamental analysis and the other is trend following.
    This is a fair definition from wiki “Fundamental analysis maintains that markets may misprice a security in the short run but that the “correct” price will eventually be reached. Profits can be made by purchasing the mispriced security and then waiting for the market to recognize its “mistake” and reprice the security.”
    Now you see that when someone sees that a stocks price set by the market is less than the ‘true price’ people using fundamental analysis buy the stock – so you are right – they buy low and sell high.
    Trend following is different – Price is the true north star is the motto. that is ‘everything, every bit of information – past, present, and future is reflected in the price’.
    So if the price is increasing you buy and if the price is decreasing you sell. This seems extraordinarily counter intuitive, but it works in the most powerful way. For example for DMSI indicator : Of the total of 60 bullish signals since December of 1971, 38 have been “correct” for an average gain of 16.66%. The 22 “incorrect” signals produced an average loss of 2.5%
    So sometimes the indicator would cause us to buy high and sell low – which is why we have 22 losses for around 2.5%.
    But look at the average gain of 16.66% when correct.
    So what does it all mean ? I am basically reacting to the market. I am not predicting, i am not analyzing what forces cause the market to go up and down. I am not concerned with the ‘why’ . Because there is this thing called ‘analysis paralysis’. I am just noticing one and only one thing: Price. If the price is going up it will continue to go up and if it is going down it will continue to go down, till the market decides otherwise.
    If the price is going up i simply ride the wave up. This is the core of trend following, and it is extraordinarily freeing, since i am not concerned with the news, the analysts opinions, macro economics etc. If you like to read more on trend following please go through http://www.michaelcovel.com/
    At the end of the day, you have to develop a KISS system (Keep it simple and sweet). Nothing can beat a consistently following simple systems. It will free your time, save your money, and mental energy. DMSI is just one indicator. it is beautiful and simple.
    Please let me know if you have any further questions. Will be more than glad to answer.

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