Exploring Steel Momentum

Today’s notable stocks are listed at the bottom of this post!

“Trading momentum is paying-off in the current market environment. Swing trading breakouts making new highs on volume at least 100% larger than the average is king. It’s working so pay attention and be smart while putting on trades.”

– This was a quote of mine on February 25, 2008 in a post titled Stocks Catching my Eye

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I profiled two new stocks, TITN and RIO, which haven’t made much of a move over the past week but MTL (mentioned as well – extended) was already up 15% in two weeks. The stock has added further gains for a 25% gain in three weeks.

  • MTL – 139.93, is now up more than 25% since my analysis on February 12, 2008. MTL first crossed a screen back on December 3, 2007 at $90.98 but I admit that I wasn’t looking to buy at that point (it was new to my screens).
  • EOG – 118.04, was the second stock scanned on February 12, 2008 as it was up almost 5% on volume 112% larger than the average. The stock was just starting to break out to new highs while gaining nice momentum. It has gained more than 24% in three weeks while breaking out to new highs on above average volume.

The lesson: buying momentum, especially when a stock makes a new high on above average volume can be very profitable. What seems high to one investor can be low to another (precisely the case for MTL and EOG).

030308_eog_daily.png

Several other names from the February 12, 2008 blog post are also higher (in less than a month): SWN, RCC, NEU and KWK

Basic Materials (Oil) Stocks Making New Highs

MTL – 111.60, Mechel Steel Group was up 10.60% on volume 97% larger than the daily average

Stocks Catching my Eye: MTL – 126.83

Daily Screen for Monday 12-3-07

Interesting Stocks Making New Highs: MTL – 90.98

Basic Materials (Oil) Stocks Making New Highs

EOG – 98.43, EOG Resources was up 4.58% on volume 112% larger than the daily average

Other Notables Today:

  • GFA – 41.50, up 5.95% on volume 191% larger than average (what will happen with earnings tomorrow); a thirteen week cup shaped pattern has now formed. Profiled yesterday.
  • NEU – 71.16, up 6.29% on volume 154% larger than the average, closing at a new 52-week high (screened on February 12, 2008 as well)

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030308_eog_wkly.png

Comments

  1. Hi Chris,

    Thanks for posting all the new stocks on your site. It is very informative. The question I have is what daily average volume scanner is your research based on (is it 50 days or 100 days, etc…) and what is the minimum percentage of move are you looking at?

    Brandon.

  2. Brandon,
    Average volume is usually 50 or 60 days. I look for moves at least 2% from the previous day on volume 100% larger than the daily average.

  3. Thanks for the clarification.

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