Monthly Archives: August 2014

StockTwits Top 10 Follows Market

The StockTwits Top 10 Portfolio is following the market this month. It took a steep dip early in the month and has now recovered and is moving higher. It is lagging the S&P 500 (SPX) due to several stocks that are flat. The only real laggard is Groupon (GRPN) down 3.5%. The only stand out is Micron (MU) up 7%.

If you want to see more bullish stocks from StockTwits we’re temporarily offering a 7 day free trial. You’ll have to set up a subscription, but if you cancel within a week you won’t be billed. The trial includes everything from most bullish and bearish lists, stocks with consistent social media momentum, watch lists for long and short stocks, and individual charts with social media momentum for over 650 stocks and ETFs. You can even download the full history of our daily indicator to do back testing.

Below is a performance chart and details of of the current holdings.

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Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss
8/1/2014 $BIDU 55 212.38 11680.90 214.51 11798.05 1.00%
$MU 355 31.09 11036.95 33.3 11821.50 7.11%
$INTC 303 33.75 10224.74 35.05 10620.15 3.87%
$CMG 15 675.14 10127.10 675.15 10127.25 0.00%
$AA 622 16.44 10225.68 16.45 10231.90 0.06%
$GS 60 170.25 10215.00 176.55 10593.00 3.70%
$JCP 1061 9.63 10217.43 10.13 10747.93 5.19%
$GRPN 1582 6.46 10219.72 6.24 9871.68 -3.41%
$SINA 219 46.53 10190.07 46.57 10198.83 0.09%
$BIIB 31 329.83 10224.73 341.03 10571.93 3.40%
Cash 147.66 147.66
Totals 104509.98 106729.88 2.12%
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Most Bullish Stocks on Twitter and StockTwits

After a short term bottom in the market an easy way to find the next set of leaders is to check and see which stocks have the most support from people on Twitter and StockTwits. Here are the list of the most bullish stocks on the streams over the past two weeks (ending 8/20/14).

FYI, we’re temporarily offering a 7 Day free trial of Trade Followers premium features. Subscriber can see the most bullish and bearish stocks, stocks with consistent momentum, long and short watch lists, and more. The lists can be viewed over several time frames ranging from one day to a year.

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Caution for LinkedIn

There are some caution signs showing up for LinkedIn (LNKD) from both Twitter and StockTwits. As price has been moving higher daily momentum from both streams are showing weakness. In addition, 7 day momentum has been painting a negative divergence for the last two weeks. This indicates traders are taking profit in LNKD and less positive about the prospect of it moving higher near term.

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The weakness in momentum has also cause LNKD to show up on several short watch lists today. Aggressive traders are seeing a short opportunity and holders see it as a time for caution.

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End of Buy Signal for Starbucks

The buy signal issued for Starbucks (SBUX) on 8/8/14 from Twitter momentum ended at the close on 8/15/14. SBUX just couldn’t get any momentum in price after the signal. In fact, during the week as the market rose the stock fell. This isn’t a good sign for any long swing trade. The signal resulted in a small loss of less than 1%. This is similar to many of the momentum trades we make that are losers. They are often short in duration and have very small losses. Over the course of our tracking long trades with trend the average loss has been less than 6%. A 2013 trade in BlackBerry (BBRY) when it collapsed 30% puts a serious drag on the average. Most losing trades are in the 1% to 3.5% range.

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Momentum Breaking Higher

Our Twitter momentum indicator for the S&P 500 Index (SPX) has cleared the consolidation warning that has been in effect since July 11th. The warning was removed at the close on Thursday when 7 day momentum broke above the down trend line that has been in place for a few months. The last dip in price for SPX also came with a positive divergence from momentum. This indicates that traders on Twitter saw the dip as a buying opportunity rather than the start of a larger correction.

Daily momentum posted a very positive print of +27 on Thursday which indicates a strong shift by market participants to bullishness. High readings on the daily indicator near short term lows act as an initiation thrust and are often followed by at least a few more days of buying. They also tend to be the beginning of a stronger rally. The combination of the high daily print and a break higher for 7 day momentum indicates market participants expect SPX to rally back to all time highs.

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Subscribers to Trade Followers were able to see momentum for both small cap stocks (IWM) and the NASDAQ 100 (QQQ) break their down trend lines early in the week indicating that traders were taking on more risk. This is another sign that the market wants to go higher.

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SPX settled right at its major resistance level of 1955 generated from price targets on the Twitter stream. The events in Ukraine have traders waiting and targeting a very tight range. Below the market support is near 1930. Odds favor a move higher if international tensions ease.

Breadth between the strongest stocks on Twitter and the weakest continues to deteriorate as fewer stocks show strong support. There is also a small creep up in the number of stocks showing weakness. This condition needs to reverse if the market continues higher or it will warn of a longer term top being formed.

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Sector strength shows a continued mixed picture with both leading and defensive sectors garnering support from market participants. Consumer discretionary, basic materials, and technology are the leaders. While consumer staples give a bit of a warning as some rotation to safety occurred.

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Overall momentum from social media is suggesting the market should move higher if the situation in Ukraine doesn’t flare up again. An initiation thrust from the daily indicator and a new buy signal from 7 day momentum show a strong desire to test the all time highs. Support for small caps and technology add to the argument that investors are increasing their appetite for risk assets. A break above Twitter resistance at 1955 will confirm the move has legs.

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Twitter Top 10 Continues Higher

The Twitter Top 10 Portfolio continues to paint a pattern of turning the corner and moving higher. This month the portfolio is being held back by El Pollo Loco (LOCO) which is down nearly 20%. As I’ve mentioned before, buying a list of stocks blindly isn’t recommended and I personally don’t like to buy IPOs until they shake out and their volatility decreases. Nevertheless, people on Twitter are excited about LOCO so it gets included in the portfolio.

The best performing stocks are Plug Power (PLUG) up 10% and Gilead Sciences (GILD) up 7%. The rest of the portfolio shows mostly small gains.

Below is a performance chart and details of the current holdings.

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Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss
8/1/2014 $FB 174 72.36 12590.64 73.38 12768.12 1.41%
$TWTR 279 44.13 12312.27 44.86 12515.94 1.65%
$PLUG 2551 5.38 13724.38 5.94 15152.94 10.41%
$GILD 118 91.50 10797.00 98.02 11566.36 7.13%
$GOOG 19 566.07 10755.33 572.79 10883.01 1.19%
$BIDU 51 212.38 10831.38 218.74 11155.74 2.99%
$INTC 320 33.75 10798.40 33.94 10860.80 0.58%
$CMG 16 675.14 10802.24 677.02 10832.32 0.28%
$AA 657 16.44 10801.08 16.08 10564.56 -2.19%
$LOCO 262 41.20 10794.40 33.22 8703.64 -19.37%
Cash 166.52 166.52
Totals 114373.64 115169.95 0.70%
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StockTwits Top 10 Shows Small Gain

The StockTwits Top 10 portfolio is up slightly to begin the month. Most of the stocks in the portfolio are basically flat, showing small gains or losses. Seven stocks are up and three are down. The largest laggard in the portfolio is Groupon (GRPN) down nearly 10%. The one standout is Sina Corp. (SINA) up 7.5%.

I had expected JC Penney (JCP) to be among the gainers after it’s good earnings report and continued support from both Twitter and StockTwits, but the StockTwits stream shows some profit taking and concern about events in Ukraine hurting the stock this morning. This will be a chart I’ll be watching over the next week or so to see if momentum is affected by the drop in price. Subscribers to Trade Followers can view over 650 charts of individual stocks with StockTwits and Twitter momentum to enhance their trading.

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Below is a performance chart for the StockTwits Top 10 portfolio and details of the current holdings.

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Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss
8/1/2014 $BIDU 55 212.38 11680.90 218.85 12036.75 3.05%
$MU 355 31.09 11036.95 31.48 11175.40 1.25%
$INTC 303 33.75 10224.74 33.96 10289.88 0.64%
$CMG 15 675.14 10127.10 677.57 10163.55 0.36%
$AA 622 16.44 10225.68 16.16 10051.52 -1.70%
$GS 60 170.25 10215.00 172.31 10338.60 1.21%
$JCP 1061 9.63 10217.43 9.41 9984.01 -2.28%
$GRPN 1582 6.46 10219.72 5.845 9246.79 -9.52%
$SINA 219 46.53 10190.07 50.02 10954.38 7.50%
$BIIB 31 329.83 10224.73 337.2 10453.20 2.23%
Cash 147.66 147.66
Totals 104509.98 104841.74 0.32%
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End of Consolidation Warning for S&P 500 Index

The consolidation warning for the S&P 500 Index (SPX) based on Twitter momentum that was issued on 7/11/14 has been cleared as of the close on 8/14/14. Momentum has moved higher and broken above a down trend line that has been in place for two months. The break also comes after a positive divergence with price. This indicates that market participants were supporting the market as it fell into the last low. The odds now favor higher prices in the intermediate term.

Note: The events in Ukraine today could change investor behavior. Now is a time to read the streams carefully and determine if this event raises fear or is seen as an opportunity to buy.

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