Rachel Fox: Short-Term Trading Tips and Strategies with Chaikin Analytics

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Great Summer Stock Plays
Finding Short-Term Performers with Chaikin
Analytics Rachel Fox - creator
FoxOnStocks.com Eric Chaikin - Chaikin
Analytics June 24, 2014
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Welcome
Chaikin Analytics for Desktop
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• What Well Cover
• (Intros)
• What is the Chaikin approach?
• How do I use Chaikin to find winning trades?
• Specific Buy and Sell Patterns
• Special Offer Opportunity
• QA

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Challenge Information Overload
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Solution
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The Solution Chaikin Analytics
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Chaikin Power Gauge
Clear summary of a stock's potential with a
record of success

• Financials
• Earnings
• Technicals
• Experts
• Improves your trading batting average!

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What is the Chaikin Power Gauge?

• Chaikin Power Gauge
• Clear summary of a stock's potential with a
  record of success
• Financials
• Earnings
• Technicals
• Experts
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• 20132013 ChaikinChaikin AnalyticsAnalytics
  LLC.LLC. AllAll RightsRights Reserved.Reserved.
  PrProprietaryoprietary andand Confidential.Confide
  ntial.

A reliable indication of a stocks potential,
with a history of success

• Very Bullish-to-Very Bearish rating
• Indicates likely relative performance over 1-to-6
  months
• 20-factor quantitative model looks at
• Financials, Earnings, Technicals, Experts
• Covers 5,000 U.S. equities
• 12 years backtesting, 3 years real-world
  performance

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Reserved. Proprietary and Confidential.
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Power Gauge Performance
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Results thru Q1 2014
Russell 3000 - Large, Mid, Small Cap stocks
Period Dates Very Bullish stocks Russell 3000 ETF SP500 SPDR ETF
All Real-World Performance Jan 11 - Mar 14 20.70 annual return 14.99 15.01
Last 12 Months Apr 13 - Mar 14 34.29 annual return 22.93 22.21
Year 2013 Jan 13 - Dec 13 49.59 annual return 32.83 32.13
Life-To-Date (includes test period) Jan 99 - Mar 14 22.28 annual return 5.07 4.64
Very Bullish stocks are highly likely to
outperform index benchmarks.
Annualized return by Rating group vs. benchmarks.
Note Test results are equal weighted R3000 and
SPDR ETF are cap-weighted.
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Play Offense Well What to buy
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What to Buy Classic Bulls

• Power Gauge Rating Bullish
• Price Trend Up
• Relative Performance Strong
• Chaikin Money Flow Strong
• Buy Signal in Chaikin Analytics

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Play Good Defense Turn Land Mines into Gold Mines
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What to Sell Classic Bears

• Power Gauge Rating Bearish
• Price Trend Down
• Relative Performance Weak
• Chaikin Money Flow Weak
• Sell Signal in Chaikin Analytics

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Why I Love Chaikin Analytics

• Can be added to any trading process
• IS the missing puzzle piece of con?rmaon
• Fits all styles Growth, Value, Momentum, Long
  Term, Short Term
• Fits all levels Beginners, Intermediates, Pro
  Traders

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Rachels 4-Step Process

1. Find Strong Stocks in Strong Groups
2. Confirm Fundamentals Technicals
3. Find the Carrots! (Buy/Sell Signals)
4. Identify Technical Patterns

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My Process Step 1

• Find heavily saturated industries
• Highly bullish

Highly bearish

• Select based on likely market direcon over next
  (1-2 weeks)

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My Process - Step 2

• Loop through
• Very Bullish stocks in strong industries (Longs)
  Very Bearish stocks in weak industries
  (Shorts)
• Do the fundamentals confirm the technical trends?
• Chaikin Analytics - great for finding strong
  fundamentals it incorporates predictive factors

Analyst Estimate Revisions, Short Interest,
Insider Activity

Confirm Chart Technicals

Strong Chaikin Money Flow (accumulation), Strong
Relative Strength, OB/OS

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My Process Step 3

• Find the CARROT
• Of Very Bullish or Very Bearish stocks ?nd
  Buy/ Sell signals

• Thats the Buy/Sell TODAY indicator. Gives me
  lower risk entry/exit point.
• Tells me when something it hot and ready to pop.
• Perfect for the short term.

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Step 3 Buy/Sell Signals

• Focus on 2 types
• Overbought/Oversold Buys Sells
• Relative Strength Buys Sells
• Overbought Sell Finds Bearish stocks which are
  overextended
• relave to their recent short-term trading range.
• Oversold Buy Finds Bullish stocks which have
  become Oversold relave to their short-term
  trading range.
• Relaltve Strength Sell Measures the stocks
  performance relave to the market as a whole. If
  the price has a risen but not as much as market,
  Chaikin will give a sell signal.
• Relaltve Strength Buy - Measures the stocks price
  relave to the market as a whole. If the price
  has fallen but not as much as market, Chaikin
  will give a buy signal

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Step 4 Identify Patterns

• Technical Patterns
• Consolidations
• Reversals
• Continuations

Look for these in another intraday trading system
- complementary to Chaikin If the stock has been
bullish for a while Chaikins system shows
there is a buying signal BUT there is a technical
consolidaon pa\ern forming, Ill wait to see if
the stocks next technical pa\ern breaks higher or
lower.
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Consolidations
Channel
Symmetrical Triangle

• Ascending Triangle Descending Triangle
• If the stock breaks lower out of a consolidaon
  pa\ern, my guess would be that a reversal pa\ern
  is forming and I would NOT buy the stock.

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Reversals
Double Bottom
Double Top
Multiple Bottom
Multiple Top
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Continuations
Bearish Pennant
Bullish Pennant
Bullish Flag
Bearish Flag

• If the Consolidaon pa\ern breaks higher, then my
  guess would be a Connuaon pa\ern is coming
  next. If I get con?rmaon of a Connuaon pa\ern,
  Ill move forward and buy the stock.

Wedge
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Chaikin Analytics Demo
Lets look at the system
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Trades I Made with Chaikin

• EL - Estee Lauder 3/11 (short) SGMA Sigma - 3/13
  (long) CKH- Seacor 3/13 (short)
• N - NetSuite 4/3 (short) - also just shorted it
  today!
• TFM - The Fresh Market 3/14 (short)
• HII - Huntington Intl - 3/20 (long) -
  personality change
• TTM - Tata Motors - 4/30 (long)

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