Tuesday, October 11, 2016

Slingshot Refresher.

One of my favorite setups is a setup I call the Slingshot.   The theory behind this setup is that we take a powerful stock and stretch it with pull back.  Then when momentum resumes we enter.


So that theory requires two component: (1) determination of power; (2) determination of resumption of momentum.  Power can be found using a variety of scans.  52 Week high, RSI, High OBV, high Mdt.   High RS compared to the S&P.  Feel free to use your favorite.

The resumption of the momentum for the slingshot is triggered by the break of the 4EMA of the HIGHS.

Here's a few examples:


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2 comments:

  1. Joe FOctober 12, 2016 at 10:20 AM

    Thanks Scot. Do you have a point or rules you look to for exit?

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    Replies
    1. Scot1andOctober 16, 2016 at 3:09 PM

      I like to sell a portion of my position early into the advance, which lets you hold the remainder longer. Then I use trendlines, as long as the market is not giving distribution days, I will hold the positions

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