Putting my money where my mouth is – Technical Indicators – Part 3

Note from the Author:  My first article, Helpful Stock Indicators - Part 1 
can be found by clicking on this link.  My second article, Putting My Money
Where my Mouth Is - Technical Indicators - Part 2 can be found by clicking
on this link. This is the 3rd Article in this ongoing series.  I am not
real happy with this portfolio ... but it is what it is and this should
show you the real need to manage your money properly and have a "game plan"
for entry and exit points.

Well it’s been a few months since I made these investments so let’s see how we stand today.

If you recall, I simply did a search on my Vectorvest software on 02/14/2019 to come up with 10 stocks in the S&P 500 that had just in the past one day had a positive sign on the MACD.  Here is the search and a list of the stocks I purchased on that date that I sent out to you earlier.

The Search Criteria

MACD Selection Criteria

The List of Stocks

MACD 10 Stocks

My Actual Purchases on 02/14/2019

MACD Portfolio

Now the important thing I want you to remember is that I did not check anything about these issues, such as financials, volume, short interest or look at any graphs before purchasing them.  I just wanted to see how I would do by making a sizeable investment based solely on the MACD timing tool.

I did tell you this was my exit strategy with these stocks.

My exit strategy is as follows:

  1. Sell the stock if it falls by 10% in value over the next two weeks or 15% in value over a period longer than that.
  2. Sell the stock if it gains 50% in value … Remember:  Pigs get fed and Hogs get slaughtered.

We have had such a rocky market since mid February that I decided to make one minor change.  I decided to sell any stock that fell by 10% or more at any time.  However, I also decided I would not set stop loss orders on these and would simply watch them myself with alerts being sent to my email.

So how have we done … which is the real purpose of this follow up.

Here’s my latest spreadsheet updated through today:

MACD day 43

As you can see … I have had to sell 3 of the stocks due to prices falling.  Remember I said in my first article …

“Fundamentals are very important when you are looking to buy a stock – but once you own it – Price is really what matters.”

Within 8 days I was closing out Concho Resources with a loss of $999.71 or 11.11% (just under my 10% target).

On the 28th day I had to sell The Mosaic Company with a loss of $744.36 or 11.59% (again just under my 10% target).

And today, the 43rd day, I sold The Interpublic Group of Companies with a loss of $406.55.  When I put in the sell order it was down about 10% but due to the dividend that was reinvested the overall loss on this one was only 8.79%.

In total, I’ve suffered losses of $2,150.86 on 3 of the 10 stocks.  However, the other 7 stocks I still hold are up $1,175.49 so my overall loss is only $975.00 or about 1.50%, and I can live with that — as long as the rest continue to trend up.  Had I continued to hold these stocks I would have been down my $1,025.67 vs. the loss of $975.00.

What I could have done – though it was not part of the plan – was to invest the money taken out when the stocks were sold and invest those proceeds into the winning stocks.  This would have had the overall portfolio up even further.  Perhaps I will do that on a future portfolio test.

In the meantime, we will check back on this portfolio in about 30 days time (though I will be watching it daily).

Should you have any questions, please feel free to call me or write me.

Thanks,

Jerry Nix, FreeWaveMaker, LLC

Disclaimer:

This information is not recommendations for you to purchase or sell any investments outlined in this article.  The information is being shared for educational purposes only.  I recommend that you seek the advice of a licensed and competent financial advisor before taking actions on your portfolio if you see a need to after reading this article.

The author of this article is long on the following investments outlined herein: FL, CE, CAT, MRO, PWR, IKE, and LLY.

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