Love It When a Plan Comes Together

 | Nov 08, 2013 | 1:00 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


With thousands of stocks to review on a daily basis, I use certain indicators to alert me for opportunities.

One of my indicators is my 3-Day Rule, which provides clients entry and exit levels over a three-day period.

  • Day-1 Rule : If stock trades inside my buying zone, then I'll look to trade 25% of the position.

With Whole Foods (WFM), yesterday was Day 1 of our rule, with the stock falling 11% and inside the buying zone ($58.30-56.57).

Based on this rule, clients would be long 25% of the position with an average price of $57.70 .

WFM closed lower than our average price, but these trades are not for the short-term trader as most take three days to get in or out.

  • Day-2 Rule: Watch for a higher low and still inside the buying zone before adding to the position.

It is Day 2 today and WFM got a downgrade. I love it when a plan comes together, as WFM is not yet long-term oversold.

Further weakness today might get WFM to trigger a long-term oversold signal. Look to buy 25% again inside the buying zone ($58.30-56.57), but not lower than $56.57.

Tomorrow, we look for a close above the Day 1 close at $57.26 to add more to longs.

I will follow up next week on WFM and other 3-Day Rule research previous sent.

Columnist Conversations

There were nice reversal-type candles on the weekly charts of the major indices. The DOW and the S&P forme...
A number of stocks on my watch lists are attempting to form positive candles a key support levels. I noted th...
While last week was a day to pull the plug and contemplate where the market was headed, I waited for some conf...
Shares of TSLA have formed multiple hammer candles at a key level of support defined by: the September head an...



Columnist Tweets


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.