Successful Stock Signals for Traders and Portfolio Managers: Integrating Technical Analysis with Fundamentals to Improve Performance + Website

357 Pages·2013·15.21 MB·English

Successful
Stock
Signals for
Traders and
Portfolio
Managers
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Successful
Stock
Signals for
Traders and
Portfolio
Managers
Integrating Technical Analysis
with Fundamentals to
Improve Performance
THOMAS K. LLOYD, SR.
Cover image: © iStockphoto.com / Olena_T
Cover design: Wiley
Copyright © 2013 by Thomas K. Lloyd, Sr. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
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Library of Congress Cataloging-in-Publication Data:
Lloyd, Thomas K., 1937-
Successful stock signals for traders and portfolio managers : integrating technical analysis
with fundamentals to improve performance / Thomas K. Lloyd, Sr.
pages cm. — (Wiley trading series)
Includes index.
ISBN 978-1-118-54452-5 (cloth); ISBN 978-1-118-65200-8 (ePDF);
ISBN 978-1-118-65191-9 (ePub)
1. Stock options. 2. Portfolio management. I. Title.
HG6042.L586 2013
332.63´2042—dc23
2013004419
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
To Eileen
v
Contents
Preface xvii
Acknowledgments xxi
CHAPTER 1 Using Moving Averages and Relative
Strength Performance to Beat
the Index 1
Relative Strength Index, Money Flow Index,
Keltner Channels, and Standard Deviation,
with Apple Exhibits
Know the Playing Field 1
Apple Computer’s 200-Day Moving Average 3
20-, 50-, and 200-Day Moving Averages 4
Relative Strength versus the S&P 500 Index 6
Keltner Channels 8
Mean Reversion 8
Breakout Signal 9
Apple’s Top at $644 9
Relative Strength Index (RSI) 10
Money Flow Index (MFI) 10
Standard Deviation (StdDev) 11
Relative Strength Performance, AAPL: $SPX 11
Supply and Demand 12
Summary 13
vii
viii CONTENTS
CHAPTER 2 On-Balance Volume, Accumulation/Distribution,
Chaikin Money Flow, Pivot Point, Resistance
and Support, and Point & Figure Chart, with
Apple and Google Exhibits 15
Price and Volume 16
Chaikin Money Flow (CMF) 18
Moving Average Convergence/Divergence (MACD) 18
Value-Added Signals 19
Using Moving Averages 19
Pivot Point, Support and Resistance Points 20
Reverse Head-and-Shoulders Bottom 20
Apple Earnings Report 21
Case Study Questions on Apple 22
Planning for Apple’s Earnings Report 22
You Must Now Make a Decision on Apple before Earnings 25
Answers to the Case Study Questions 25
Summary of the Apple Case Study 30
Google Case Study 30
Summary of the Google Case Study 38
CHAPTER 3 Bottoms and Tops, Buying and Selling Cycles,
and Percentage Price Oscillator (PPO), with
IBM and Hewlett-Packard Exhibits 39
Inverted Head-and-Shoulders Bottom 39
Double Top and “V” Bottom 41
Resistance 41
Cycles 42
Writing Puts and Calls 42
The “Cloud Stocks” for the Future 43
Long-Term Investing 43
Buy-and-Hold Strategy Is Problematic 44
Hewlett-Packard Case Study 46
Case Study Answer 47
Percentage Price Oscillator (PPO) 49
My Answer to the Case Study 51
Summary 51
Contents ix
CHAPTER 4 Sell Signals 53
Double Top, Failed Momentum, 10- and 20-Day
Trends, Broken Support, Aroon Oscillator, and
Directional Movement with ADX, with
Herbalife Exhibits
Technical Signals before a Blowup 53
Technical Signals after a Blowup 54
Double-Top Warning 56
The 10- and 20-Day Moving Average Signals 58
Aroon Oscillator and Directional Movement 59
Comments after the Herbalife Blowup 60
Herbalife Case Study Challenge 62
Answers to the Case Study Questions 64
The Daily Chart Looks More Bearish 65
Summary 67
CHAPTER 5 Supply and Demand, Candlestick Signals,
and Point & Figure Chart, with
Facebook Exhibits 69
Candlestick Sell Signal for Facebook 69
Failed Facebook versus Lucky LinkedIn 70
Portfolio Managers Prefer
Fundamental Analysis 71
The Facebook IPO Game 72
Facebook Selloff 73
Facebook Dives Because of Supply 74
Traders Look for Ineffi cient Markets 75
Facebook Secrets Took Price Down 76
Facebook: The Rush to Sell on the First Day 77
Facebook Price in Search of a Bottom 78
Why Is Price Going Down? 79
Seeing Demand/Supply on the Chart 80
Waiting for Buy Signals 81
Picture of a “Busted IPO” 82
Point & Figure Chart Shows Continued Selling 83
x CONTENTS
On-Balance Volume 86
Accumulation/Distribution 86
Summary Picture of Supply and Demand 88
Facebook’s First Earnings Report 88
CMF Signal 89
MFI and MACD Signals 90
Gravestone Doji Candlestick Signal 90
Pivot Point Support/Resistance Levels 91
Day–Trading Signals 91
Tremendous Supply Overhang 93
Summary 93
CHAPTER 6 Breakout Signals 95
Ascending Triangle, Bullish Rectangle,
Double Bottom, and Falling Wedge,
with Microsoft, Lululemon, and Home
Depot Exhibits
Double Bottom and Bullish Rectangle Breakout 95
What Is Wrong with Microsoft? 96
What Caused Microsoft to Break Out? 98
Falling Wedge Signals Double Bottom 100
Candlestick Hammer a Bullish Reversal Signal 100
Case Study: Home Depot Ascending Triangle 101
Summary 104
CHAPTER 7 Relative Strength Index, Stochastic,
and MACD, with Lululemon Exhibits 105
Case Study: Lululemon before
Earnings Are Reported 108
What Are You Ready to Do? 110
Answer to the Case Study 111
Now Are You Ready to Sell Call Options? 112
False Sell Signals in the 200-Day and
Relative Strength 117
Summary 120
Contents xi
CHAPTER 8 Blow-Off Top, Trend Line Reversal,
Channel Breakout, and Fan Lines,
with Green Mountain Coffee Exhibits 121
Why Study Stocks that Blow Up? 121
How to Make Money When a Stock Crashes 122
Blow-Off Top and Trend Reversal 122
Sell Signals before the Fall 123
Selling Short after Einhorn’s Presentation 126
The Fatal Sell Signals 127
Bottom Fishing Green Mountain a Year Later 128
Looking for Buy Signals 130
Trading the Dead Cat Bounce 132
Summary 134
CHAPTER 9 Classic Top, Death Cross, Double
Bottom, Bull Trap, and Dead Cat
Bounce, with Netfl ix Exhibits 135
Classic Top: End of a Long-Term Uptrend 135
You Must Have a Sell Discipline 136
Death Cross, Dead Cat Bounce to a Bull Trap,
Double Bottom 138
Buy Signals to Double Your Money on the
Dead Cat Bounce 139
Dead Cat Bounce Up Fails 141
Broken “W” Bottom—Negative Surprise 144
Second Dead Cat Bounce and Second Failure 147
Summary 148
CHAPTER 10 Gaps, Divergences, Breakdowns and
Breakouts, Oscillators, with Research In
Motion Exhibits 149
Apple versus Research In Motion,
Stock Pairs Hedging 149
The Fall of Research In Motion from $148 to $35 151
Negative Divergence 152