Recovery Stocks

top_image4

Recovery Stocks

datesymbolcompanysectortriggeredstoptarget1target2
03/30TGTTarget CorporationConsumer Stores -96.0090.50113.00130.00
03/27QCOMQUALCOMM Inc.Telecommunications -27.0066.6080.0087.00
03/27DBOInvesco DB Oil FundCrude Oil -6.155.488.509.75
03/27KOThe Coca Cola CompanyConsumer Beverages -42.8038.8050.5055.00
03/27JNJJohnson & JohnsonHealthcare -123.15113.80140.00146.00
03/26PFEPfizer Inc.Drug Manufacturers -31.7528.8035.5038.00
03/26SPYS&P 500 ETFMarket Index Fund -261.20227.50299.00313.00
03/26SVXYShort VIX ETFVolatility Index -31.3527.2546.0054.00
03/26CCitigroup Inc.Financial Services -46.0234.9061.5072.00
03/26GSThe Goldman Sachs Group, Inc.Financial Services -169.75141.50198.00222.50
03/25DIADow Jones Average ETFMarket Index Fund -214.43189.50248.00270.00
03/25IWMRussell 2000 ETFMarket Index Fund -109.9793.40136.00152.00
03/25BAThe Boeing CompanyAerospace Defense -158.7393.25232.00285.00
03/25GEGeneral Electric CompanyIndustrial Machinery -7.565.9510.0011.50
03/25XOMExxon Mobil CorporationOil & Gas Energy -37.2929.7548.0055.00
03/25MCDMcDonald's CorporationRestaurants -162.98134.00180.00198.50
03/25HDThe Home Depot, Inc.Home Retail -181.76145.50202.00223.00
03/25ADBEAdobe Inc.Technology -305.91279.00338.00360.00
03/25AAPLApple Inc.Technology -245.52227.00276.00300.00
03/24QQQNasdaq ETFMarket Index Fund -183.66164.75205.00220.00
03/24SBUXStarbucks CorporationRestaurants -64.8853.9074.3083.50
03/24HLTHilton Worldwide Holdings Inc.Hotels Lodging -69.3959.5086.0098.00
03/24MSFTMicrosoft CorporationTechnology -148.34132.50164.50176.60
03/24FBFacebook, Inc.Internet Services -160.98142.00185.00203.50
03/24DISThe Walt Disney CompanyEntertainment -98.1280.95117.00131.00
03/24AMDAdvanced Micro Devices, Inc.Technology -46.2238.9049.5053.75

The Recovery Watchlist represents stocks and sectors that have been beaten down hard during the recent market selloff to extremely oversold levels. The unique symbols in the list are expected at some point to make a strong rebound and potential longer term recovery as the dust settles and the value buying in the market resumes. As previously strong stocks and sectors attempt to put in a bottom after such a large drop we typically see price retracement back into previous levels of overhead resistance. These are computed as Target 1 and Target 2. Some of the symbols on the list will only make it to retracement level 1. Some will make back to the target 2 level and some will eventually climb back into and resume their former strong uptrends.

How Use The Recovery Stocks Watchlist

The table is sorted by the date column on the left with most recent dates at the top. When a symbol triggers as a potential recovery buy it will show the current date in the date column and the row will be colored green. So you can always check the top of the list for any new recovery triggers. The Triggered column shows you what the closing price was the day symbol became eligible to buy. NOTE: The symbol is a BUY anywhere above the STOP PRICE. The two longer term recovery targets are posted to the right.

Recovery plays can take place in one of two ways. One is a forceful knee-jerk reaction back to the upside in a rapid move that never looks back hitting the retracement targets relatively quickly potentially in a matter of weeks. The second is a slower more volatile climb that grinds it’s way back up over time, sometimes faltering several times before finally achieving the retracement. This could take 3-5 months or longer. Some stocks may trigger as a recovery play but later hit the suggested stop levels. These stocks will RESET and remain on the Recovery Watchlist for a new trigger at some point in the future. A martingale approach can be used when playing the recovery candidates, i.e. start off with a small position at the first alert and if the recovery fails from that point and the suggested stop level gets hit take a larger position the next time the symbol triggers. Example: 1st position 100 shares. 2nd Position 200 shares. 3rd position 300 shares. You simply add the original starting number of shares from the first attempt into the position on each retry.

Diversification Is The Key

If you have sufficient capital you should consider taking a “buckshot” approach and diversifying your recovery plays with several vehicles in the list. (3-5 is ideal) In this way you reduce risk on any one holding as well as you widen the net to increase your odds of catching good recovery candidates from the list. An example would be to play the oil recovery with DBO, the general market recovery with any of the Market Index Funds, and a couple of individual stocks in the list that appeal to you.

Introduction to the Recovery Watchlist Video