Tim Reazor
Chief Investment Strategist
Noram Asset Management
Don’t Chase. No matter how bad temptation is trying to lure you into bad habits – don’t chase. There is no need to rush in tomorrow morning and buy anything. The market will be there. It’ll be there the next day to. Why am I being so cautious? Because I know that disciplined investors rule the day; not the seat of you pants the market is moving without me types. Ask yourself. Where is the opportunity right now? What stocks give me an edge?
Your edge comes from buying stocks in this environment that are still in bases or just emerging from bases. You’ll most likely lose money if you chase extended stocks or stocks that have made most of their move higher. Remember, most stocks with superior fundamentals and technicals in the correct environment will go up about 20% and then take a break.
With this in mind which stocks are sill setting up? Under Armor (UA) and Chipotle Mexican Grill (CMG) come to mind – both are near the top of their buy zones. Adhering to a buy zone reduces your risk when buying individual stocks. UA’s top of the range is near 118 while CMG’s is near 589. Scale in… this too will reduce your risk. I’m currently long CMG while I have no current position in UA.
Tomorrow I’ll discuss how to handle your stocks and the current state of the market. If you have any questions on scaling in, buy points or how I design my stock and options trades drop me line. I’m always available at Tim@NoramCapital.com and @TJReazor on Twitter.
Best Regards,
Tim
