Watchlist Ideas and Optimal Entries

When the market gaps higher like it did today it leaves those in cash wondering whether they should accept greater risk and chase prices higher or  if they should sit on the sidelines in cash waiting for a pullback.  Thus far today, the pullback has not materialized and if it does, it may be a failure (doesn’t seem likely).  So what to do? {+++} The reason I like to share numerous ideas each day is so that if the entry parameters are not met, there are other stocks on the “B-LIST or WATCH LIST” to choose from.  As I mention from time to time, the watch list ideas will sometimes be the best trades for the day.  The reason these stocks are on the watch list is that they often need a little further time to develop into a good trade candidate.  When the “A-List” if ideas move without a decent low risk entry point my next move is to scour the “B-List” for potential opportunities.

Remember that the parameters I outline for possible entry are made when the market is closed, as soon as the market opens we have new information which needs to be considered because the risk/reward ratio may have changed with new price levels.  There are times when the market co-operates and gives us those perfect entries, but days like today can leave the feeling of missing out.  I will refer to a quote “It is better to be on the sidelines wishing you were in, than it is to be in and wishing  you were out”  Imagine being short today?  Of course our goal is to make money, not do better than someone else, but to make money everyday.  No one makes money everyday but it is consistency which should be the goal.  Do not let strong price action in one direction motivate emotionally based trades.

One idea that struck me as a good candidate was NKTR, you can see below how I traded that stock.