EOM Garden Growing Part III: PCN 8.22.17
We have discussed Black Swans. You will hear more about Red Swans. Click here for details.
I have always warned about the risk of going long at the end of a rally day like yesterday. Let’s see how it works out today, for those buying after 2 PM yesterday.
In this part of my “Garden Growing” training, I analyze each All Star A & B candidate, extrapolate the number of shares purchased with an estimated target price then determine alert conditions.
Today I analyze PCN…
1. Trading in a positive correlation (.89) to the SPX
2. Pays a monthly .11/share dividend
3. Previous pullbacks were 10%, and 20%
4. Current trading under the 6 EMA
5. Indicators are dropping
6. MACD remains negative
7. CMF is now negative
Action Points for Setting Alerts
1. Price closes under the 6 SMA or 10% drop-it is there now
2. MACD Histogram crosses back under zero-it is there now
3. CMF crosses under zero-it is there now
4. RSI closes under 30
5. Slow Stochastics crosses under 20
Note the indicator levels when PCN made previous runs.
The institutions will have their alerts set for a duplicate scenario. I plan to do the same.
When we receive a Simple Simon Buy Signal, go to the daily chart and confirm another SS Buy Signal before buying.
Per my DOE Sample worksheet, since no one knows the exact price when the Simple Simon Buy Signal hits, I extrapolated an (R1) targeted $15.00 entry price.
This would purchase 33 shares. Any unused funds are swept into the Round Two (R2) allocation for future opportunities.
For those wanting to be all in simply allocate all 1K.
When my analysis is complete, I plan to compile all steps into a single PDF document, available exclusively to EOM Members.
If you have questions, please send them to me at firstname.lastname@example.org.
This week and next, I continue my analysis of our All-Star A&B list, to establish entry strategies.
Enjoy your week!
David O. England