Swing Trade The Elevator up and the Escalator Down

Goldman Sachs is giving us a road map to print money swing trading the stock market.  Well, even though there are no secrets here, they’re the ones how published it.  The top holdings by hedge funds, and found below is only the top ten.  (The remaining list can be found in the referenced article at the bottom of the page)

Top Ten Stocks Held By Hedge Funds

top 10 hedge holdings

Not only are these stocks found as the top holdings within the hedge fund community, but you can bet your bottom dollar they are also found in many mutual funds, closed end funds and exchange traded funds and products.

The reason this is important information for us, is many represent great swing trading opportunities.

If you glance at just the top ten, you’ll see four stocks with negative returns.  Of those, three have shown real signs of weakness against their respective tracking index.

Part of my analysis to select stocks for a potential short swing trade, is they should already show signs of weakness against the overall stock market.  We always want to ride the weaker stocks lower and the stronger stocks higher.  Trying to pick tops and bottoms is much harder than playing the trend.

iwm

You can see a clear down trend in IWM which is the small cap index.  It’s below the moving averages while making lower highs.  With a stock like this, you’re looking for the ideal setup in time and price to take a swing trade based on this form of technical analysis.

On the flip side, now let’s take a look at the mirror image – an up trend.

disney

Here is a daily chart of Disney.  Another clear picture, only this one is in an uptrend.  While we may be able to calculate the highest probable move upward, the better risk reward is to find a time and price setup to go long this stock.

The main thing to remember is putting yourself in the highest probability scenario to have a profitable trade.

At MyStrategicForecast.com, we provide technical analysis and consistent swing trade ideas that make our members and subscribers consistent profits.

You can view the complete list to top hedge fund holdings here.

http://blogs.wsj.com/moneybeat/2014/05/22/goldman-sachs-here-are-50-stocks-most-loved-by-hedge-funds/?mod=yahoo_hs

About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

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