I hope this posts finds all of you well. I also hope that this post finds you a little bit richer. This weekend I wrote a blog post which posted this morning before market open. In it, I detailed a new screen I was trying, and the results that it produced when I ran it. Here's what happened today...
S&P 500 - +12.35, up 1.11%
Cabela's Incorporated (CAB) - +$.58, up 3.47%
Children's Place Retail Stores, Inc. (PLCE) - +$1.49, up 3.12%
True Religion Apparel, Inc. (TRLG) - +$.94, up 4.93%
Overall, if you invested in all three in equal increments, you would have seen a total return of 3.84% today, more than triple the return of the S&P 500 which returned 1.11%. I must say, I am very intrigued by the possibilities of this type of screen. As you can see, the screen identified stocks that will move higher much harder than the overall market. In an up market, this is a great thing, in a down market, it's just as bad.
If one is able to identify short periods of time where the market is likely to trend higher, this can be a very profitable strategy. I am going to keep an eye on these stocks for a while, and will look for opportunities in the future to test this stock screen further. While I myself did not buy any of these names this morning, as this was an experiment, in the future if I were to do so I would take part with near dated options. With near dated options I will have a defined risk, and the potential for a higher percentage gain will be much greater. Had I been trading such options today, odds are I would have covered those options in the same day with a substantial profit.
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