Bollinger Band Uptrend Dip Strategy Update

In light of the nasty market environment, I've decided to alter my price targets. A 3:1 return-on-investment when the stock market is tanking is beyond wishful thinking. Instead I'll aim for a 3%-5% gain (depending on the stock's ability) and place a 3% stop limit and 3% trailing stop loss after the buy. We'll see if that keeps me in green ...

Bollinger Band Uptrend Dip Week 2 Watchlist

My goodness, this market is brutal. Another close at a loss. The good news for me is, I haven't seen many candidates turn into actual picks. I have amassed a slew of stocks and ETFs in my watchlist though. A lot of them are poised for "buy" upgrades, but somehow they don't seem to get there. Here are a few that are close though, relatively speaking:

Stocks	Status
HNR	Waiting for RSI, Upper Bollinger Band, and SMA to simultaneously increase in value
BX	Waiting for RSI dip and higher rise and the Upper Bollinger Band to significantly increase in value
QGEN	Waiting for RSI, Upper Bollinger Band, and SMA to simultaneously increase in value
MF	Waiting for RSI, Upper Bollinger Band, and SMA to simultaneously increase in value
CHTP	Waiting for RSI rise higher than 64.23 (a peak RSI value)
AIG	Waiting for RSI, Upper Bollinger Band, and SMA to simultaneously increase in value
OCZ	Waiting for RSI, Upper Bollinger Band, and SMA to simultaneously increase in value

It's probably a good sign that I don't have too many "buy" finalists in this market. Some candidates not featured in the list above have actually tanked since I started watching them. My impatience at having few-to-no poistions was immediately supplanted with gratefulness.

Bollinger Band Uptrend Dip Strategy Criteria

This is slightly updated from my first Uptrend Dip post—namely, the RSI criterion checkpoint:

ü  Simple Moving Average (SMA) in an upward or neutral direction

ü  Upper Bollinger Band increases in value as the price either crosses above the SMA line or increases after a previous down closing price (all above the SMA line)

ü  Relative Strength Index (RSI) has an upward trend

To determine if the RSI is in an upward trend, I draw an imaginary or actual line from the last three or four (not an exact science) dip points. I draw a separate imaginary or actual line for the last three or four peak points. (Some dips and peaks will occur in between the major ones. Their direction is important, but I mainly focus on the obvious ones.)

As an example, I drew on the RSI trend lines for my 1-year BAC (Bank of America) chart.

If the trend lines create a lane that points upward, and an RSI and price dip occurs within that lane, I would consider buying. If the trend lines create a lane pointing downward, I wouldn’t consider buying.

I’m curious to see if following this strategy will lead to GREEN!

Bollinger Band Uptrend Dip--Weekly Assessment 1

My first weekly assessment for my new (and let’s face it, favorite) Bollinger Band Strategy: The Uptrend Dip.

I neglected to post my picks for 6.9.11 and 6.10.11. I had too much to do for my regular job—and I was a bit lazy.

One thing to note about this strategy: Unlike the Bollinger Band Bullish Breakout strategy, where I would run my scan and immediately set my purchase price, stop limit, and price targets for those qualifying under the criteria, the Uptrend Dip requires an extra day of “wait and see” before I’m ready to officially select my picks. A lot of my viable candidates did not turn into picks because they failed to rise in price, SMA average, upper Bollinger Band, and/or RSI value (this is a new additional criterion which I will explain in a subsequent Uptrend Dip post).

If a stock appears in one of the tables below, it is merely to note that it was a candidate but not an eventual pick. I’ll explain the reason below the table.

Picks from 6.7.11

Stock	Purchase Price	Stop Limit	Price Target	Price as of 6/7
SKF	65.00	63.00	68.00	65.74
URZ	3.00	2.80	3.30	3.11
DOG	41.50	40.44	43.50	41.70
SDOW	34.00	32.00	36.00	34.63

(A light green shade indicates a week closing price higher than the purchase price but lower than the price target.)

Picks from 6.8.11

Stock	Purchase Price	Stop Limit	Price Target
NCV
EWG
SAP

NCV did not close above the SMA after its dip and therefore was not put in for a buy.

EWG did close above the SMA and did increase its RSI value BUT its upper Bollinger band did not increase in value and therefore was not put in for a buy.

SAP did not close above the SMA after its dip, its Upper Bollinger Band decreased, and its RSI value decreased—hence it was not bought.

Picks from 6.8.11

Stock	Purchase Price	Stop Limit	Price Target
OXY
SSG	51.50	49.95	54.08
COG

OXY was not purchased because although it closed on 6.9.11 above its SMA and the Upper Bollinger Band increased, its RSI failed to exceed its previous RSI peak.

COG was not purchased because its RSI decreased in value.

Bollinger Band Bullish Breakout--Weekly Assessment 2

It's been a rough overall week for the BB Bullish Breakout strategy.
Just look at the carnage!

Unsettled positions from last week

Stock	Purchase Price	Stop Limit	Price Target	Selling Price	% Gain/Loss
IACI	36.80	35.45	39.50	35.45	-3.67%

Picks from 6.6.2011

Stock	Purchase Price	Stop Limit	Price Target	Selling Price	% Gain/Loss
QTM	3.30	2.31	3.52
AGEN	1.00	0.94	1.07	0.94	-6.00%
OCN	12.40	12.02	13.25	12.02	-3.06%
FXE	145.00	142	150
SM	69.50	67.41	74	67.41	-3.00%

(Gray shade indicates a week’s closing price below the purchase price but above the stop limit price.)

Picks from 6.7.2011

Stock	Purchase Price	Stop Limit	Price Target	Selling Price	% Gain/Loss
SQNM	8.50	8.15	9.00	8.15	-4.12%
EDD	17.60	16.20	18.20
DOG	41.50	40.44	43.50	41.70

(Light green shade indicates a week’s closing price above the purchase price but below the price target.)

Picks from 6.8.2011

Stock	Purchase Price	Stop Limit	Price Target	Selling Price	% Gain/Loss
DLR	63	61.10	66.00

Picks from 6.10.2011

Stock	Purchase Price	Stop Limit	Price Target	Selling Price	% Gain/Loss
CPBK	3.40	3.10	3.70
CALP	7.50	7.27	8.20	7.27	-3.06%

And with all that reported, it is with a heavy heart that I temporarily put this strategy on the shelf and devote all my attention to the Bollinger Band Uptrend Dip--a strategy with a wee bit more promise.