This week, I did not find any superstock scan after doing my weekly scan. There were a few stocks which had nice breakouts, but they either ...

How Has My Weekly Superstock Scan Fared So Far?

This week, I did not find any superstock scan after doing my weekly scan. There were a few stocks which had nice breakouts, but they either have poor fundamentals or the breakout was due to them being acquired. I would like to take this chance instead to review the stocks that I have covered in my earlier weekly superstock scans.

I started this scan since end December last year. Since then I have covered 6 superstocks, 5 from the United State and 1 from Singapore. Among them, I have entered into 2 of them. I will now review one by one how the stocks fared and did I trade them correctly,

1. Integrated Electrical Services (IESC)

This is the first stock I initiated coverage since the blog's revamp. When I first posted about the stock, it was overextended and I suggested to wait for a low risk entry.  Eight weeks later, the stock bounced off a possible magic line and I posted an update that the stock is ready to be bought at a low risk entry point.

When the market opened on Monday, I was deciding between entering EDUC and IESC. Ultimately I chose EDUC. I had the capital to enter both, but there was only sufficient cash balance in my trading account to have a position in one of them.

If I had enter IESC using a market on open order, I would be up more than 18% in four days.

2. Vera Bradley Inc (VRA)

When I initiated coverage on VRA, I was not convinced to enter the trade as its fundamental is not strong enough to be a superstock. However, I did not rule it out as a momentum play if price test the earnings gap. Ultimately it did tested the gap and I entered the trade 2 weeks after blogging about it.

I am currently up less than 5% on this stock. I will take half off it if reaches the previous high and trail the remaining with the 30dMA.

3. DRDGOLD Limited (DRD)

DRD was one of the many mining companies that surged up that week. DRD closed at 2.27 on the week I initiated coverage and my plan was to buy in batches between $2 and $2.27 since the risk/reward ratio was highly favorable.

One day after I initiated coverage, price opened higher but closed down 2.6% from the previous day. Little did I know that it was the only day of opportunity as price gap up the following day and $2.27 was not seen again.

At the time of writing the highest DRD has traded since I wrote about it was 4.03. Even with a quarter position, I would have made a nice very profit.

4. Education Development Corporation (EDUC)

When I first initiated coverage on EDUC, I was suspecting 30wMA to be a magic line for the stock but was worried that 10wMA may serve as a resistance. I wanted to wait for a lower price for a better risk reward ratio. Three weeks later price bounced off the 30wMA again and the candle closed near the 30wMA. I entered the following week at 9.95 and was up around 9.5% in a week.

5. Best World International Limited (5ER.SI)

I was ready to trade Best World International when I initiated coverage on it. When the market opens the following Monday, I realised that the spread was too wide and the liquidity was too low. I decided to drop the stock from my watchlist.

Looking at the chart, it appeared that I would have made more than 10% in four weeks if I had stuck to my plan. In actual fact I would have poor execution entering the trade and I would have a hard time exiting the trade. I believe dropping the stock from my watchlist was the right thing to do.

6. China Finance Online Co (JRJC)

JRJC is at the right price to be traded when I covered the stock. All it lacks was the upward momentum. My plan was to enter the trade when price broke above the week's high or Friday's high.

On the Monday after I posted on JRJC, price gap up above Friday's high. I should have at least entered a partial position then. To be honest I forgot about JRJC that day as I was pre-occupied by IESC and EDUC (it was the day I was deciding which to enter). I did not monitor JRJC closely as I did not expect the trigger of the trade to come so quickly.

After price gap above Friday's high, I still have a second trigger - price break above the weekly high. That occurred in the first few hours of the next trading day at 4.94. At that point of time, JRJC was already up 4% with no news and I thought there ought to be a retracement, so I placed a limit order at 4.88. JRJC did not retrace and closed the day up 10%.

If I stick to my plan, I will be up by more than 5% in three days.

Learning Points

This mini exercise gave me confidence in my analysis. With a difficult start to the year for the market in general, my superstock candidates have been performing well. Some of the stocks would have even returned double digit returns within weeks or even days after posting about it.

Even if some of the trades did not work out, the entry points suggested would make the strategy profitable with a favourable risk reward ratio.

What I need to work on will be my daily routine. Forgetting to place a trade is a mistake a trader should never make. Based on my plan, I should have entered into all the five US stocks and be sitting on nice paper profits by now.

Before the market opens, I should have run though in my mind or writing how I will handle each position or enter a trade based on what may happen that day. It could be as simple as a checklist, or better still I can include the entry and exit prices of the trades I could possibly take.

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