Powerful Day-TradingStrategies Combining Fundamentals and Market Direction
By David Ristau, The Oxen Group
Knowing when to buy and when to sell is the key to every investor’s success and failure. Knowing when to buy and when to sell, however, changes for different investment styles. For long term investors, buying on bad news and selling on good news is a crucial part of investing. For day-trading strategies, including the Oxen Group’s strategies, ignore long term analyses.We are interested in what the stock is doing for the day.We use specific buying and selling patterns based on the fundamentals of the stock and a knowledge of market direction.
If you are looking to find that perfect stock that will move 3-4% each and every day, it is all based on fundamentals. News, earnings, upgrades, downgrades, mergers, etc. move stock on each day along with the market direction. Knowing how to play this information along with the market is crucial.
Today, I want to lay out for you four different types of trades The Oxen Group looks at to make our successful plays: a) good fundamentals, good market, b) good fundamentals, bad market, c) bad fundamentals, good market, and d) bad fundamentals, bad markets. You might think that the best place to make money is in a strong fundamental, good market situation, but that is not always true.
Here’s a review of the different types of trades:
Good Fundamentals, Good Market
One of the most significant market moving pieces of information is the earnings report. When we see a significant earnings beat on EPS and revenue or a strong outlook announcement along with earnings, we can expect that will help move that stock. It will not only move the stock, but it has the capability to move similar companies.
For example, let’s take O’Reilly Automotive Inc., which reported its earnings Wednesday night, July 29. The company reported outstanding earnings, beating revenue expectations, beating profit expectations, and increasing their yearly outlook.This was great news for the auto part retailer industry, and it affected a similar company AutoZone Inc. which has a similar business model.
The Oxen Pick, for Thursday, July 30, was AutoZone Inc., however, the way we wanted to buy and sell it was dependent on market movement. Coming out the same morning was the job reports and a number of crucial earnings reports that would shape the way the market would moved. The market would either move lower, move sideways, or move…
