My Strategy - Part III - Buying

Ok, now I have a list of great EPS momo stocks I like, what now! Here comes the real part, the actual buying and selling. Lets focus on the buying in this post. I have various buying strategies, mostly based on fundamental and technical indicators, while sometime it is a more personal indicator, like my time and availability factor. Here are the buying strategies I apply depending on the situation:

1. Earning Day Join the Herd - Good stock, good uptrend, good EPS growth, and the most recent qtr gives big EPS jump or a substantial earnings surprise, I try to buy it pre-open or during the market hours on pull backs. Usually works well for higher float stocks as they take time to move up. Recent Example: GME (GameStop Corp.) after beating analysts expectations by 4 cents, I got in at 46.
2. Post Earnings Technical or Pullback Buy - Similar stock as in first case, only difference is that it has low float. Low float stocks do not give a good entry, they just zoom up on earnings day (or maybe I am not able to follow the markets most of that day)! Then I wait for it to pull back over the next couple of days before buying, sometimes it even fills up the earnings day gap before moving up, or it forms a bull flag then I use technical rules to buy. Recent Example: SIGM (Sigma Design Inc.) after beating by 14 cents, shot up to 45, over the next couple of days it pulled back to around 40 when I bought it.
3. General Technical Buy - A stock from my list, makes a big move, many times without any news as such. I am sitting there amazed, wondering what has hit me, cursing myself for not taking a position sooner. Anyway if after the initial move, the stock forms a nice looking bull flag, I use technical rules to start a position, buying if the stock moves above the neckline, putting a stop below the low of the flag. Recent and very bad Example: SILC (Silicom Ltd) recently shot up from 22 to 26. Then it created a bull flag and I put a stop buy order just over 25. It then moved up to 28. Should have sold, anyway it has crashed down, stopping half my position (as the other half I put lower stop as I still believe its a strong growth stock, and it will go up. Emotions kill me!) and I am still in the red with the rest.
4. Dip Buy: Very risky, but has worked quite well for me usually during corrections. I will put a conditional limit buy order a bit below the recent lows and a stop sell order. I usually take smaller positions under this method, so can afford to have a more relaxed stop. I have missed quite some big movers as they never fell to my price, but the ones I catch have been profitable. Recent Example: CROX (Crocs. Inc.) during the rollercoaster ride over the last couple of months, market dipped big time twice, first time CROX went down to 47.01, so I put an order for 47, next whipsaw I got filled but it actually went all the way down to 44.10, oh well! Good that never hit my stop. But then it went all the way to 60 quite quickly, sold some at 60, still have some left. But the "hole in the sole" escalator story does not bode well, though it is holding above 50DMA and I personally feel, CROX is headed for bigger things a bit longer term, lets see.
5. Momentum Value Buy - I have coined this term (at least I believe so). A strong growth stock suddenly falls 20-30% due to some rumour or seemingly bad news and the market reacts too strongly, illogically! Not from classical valuation point of view but from growth potential point of view, the current price is a actually a bargain - its a momentum value. Recent Example: SNCR (Syncronoss Technologies, Inc.) Steve Jobs lowered iphone price and SNCR got hammered, from 40 it fell to around 30, I bought quite a few around 32, come on, lowering of iphone prices is good for SNCR right! That's what I call momentum value, and it got reflected right away as the stock raced to 45. It is again getting hammered, presumably because a director sold at 38-39, I hope it is something more serious than that! For all you know, that Director's daughter might be getting married this weekend!

I hope I have covered most of it, next post I will cover selling, and some more posts to talk a bit more on specific stocks.

Note: Most of the buys mentioned above were during the market correction, so I was picking smaller positions.