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Learning From Past Wins (And Playing a Fickle Market)

Hey, Ross here:

For the last Stock Surge Daily of this week, let’s look at a textbook pattern we just exited in my premium FIRE Trader service (currently closed for enrollment) – and see what we can learn.

I like to revisit successful trades to see what is working and burn the charts into my mind. This helps me spot similar setups in the future.

Chart of the Day

MINISO Group Holdings (MNSO) made a huge move higher in November, climbing 172% in just three weeks. 

Any time a stock doubles inside of a month, I’m going to pay attention. The market is telling you that something material has changed at the company, and investors are quickly trying to revalue the stock.

After the initial surge, you want to wait for a small retracement or base. In the case of MNSO, it formed a shallow downtrend on lower volume right into the 10-day moving average.

As soon as that broke, we bought. And we were able to exit the final position on Friday for a 49% gain.

When trading fast-moving stocks like this one, be sure to keep an eye on the 10-day (yellow line) and 21-day (blue line) exponential moving averages. 

One or both of these should support the stock. If it breaks below for more than a day or two, the move is likely over, and you want to get out.

Insight of the Day

The market’s interpretations of economic data can flip 180-degrees on a dime. Base your strategy on something more solid.

As recently as a few weeks ago, bad news caused the market to rise as it implied the Fed would slow down its pace of rate hikes.

But now, things appear to have flipped. News of weakening retail sales and lower producer price inflation was interpreted by the market as bad news – and caused stocks to fall instead.

In short – how the market reacts to such data can flip on a dime. You don’t want to base your trading strategy on these reactions.

A much better way is to base your strategy on things that stay constant over time. For instance, there is a specific type of “pricing anomaly” that shows up more in these kinds of uncertain markets. 

And if you know how to identify these anomalies, you could exploit them for fast double-digit gains. I’ve put together a short presentation explaining how to spot these anomalies here.

Embrace the surge,

Ross Givens

Editor, Stock Surge Daily

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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