Trading the IBD 100 ?

Discussion in 'Educational Resources' started by condorll, Feb 29, 2004.

  1. Hello,

    Does anyone have any experience trading stocks in the IBD 100 on pullbacks or breakouts ? Was your experience positive or negative. Is the IBD 100 just another coin toss watchlist in your opinion?

    I am looking for a "watchlist" of strong stocks to trade in strong sectors.

    I use primarily Technical analysis and a few mechanical systems to identify buy and sell points.

    Thanks to all who respond
  2. wdscott



    What kind of technicals do you use?

    Although I do not trade stocks, I have watched my brother-in-law trade (using that term real loosely) stocks, for over 8 years.

    Each year, he never fails to add an additional 15-30K Capital <loss> to his tax return. IBD is his sole reference for his speculative activities. Does this mean the IBD ranking is bad?

    Of course not!!!

    My brother-in-law-is just a horrible trader. And is quite unwilling to do the work necessary to become profitable.

    Correct me if I'm wrong, it's been some time since I read an IBD or WSJ, but isn't the IBD ranking based on 12-months of data. Simple or weighted MA, relative strength ranking for Industry and sector, coded ( 90,99,A,B).

    This may be helpful for Intermediate trading (2-4 month holding periods), but my Brother-in-law is into intraday scalping. He is never mindful of his timeframe.

    You will probably do better by creating your own daily list of stocks, based on some sort of volatility ranking, low ADX, ORB,etc.. using Daily Highs,low, S & R levels for Breakouts
    than to rely on Bill O'Neill and Company.

    Dave Scott
  3. gms


    I'd concur with wdscott. What's going to make or break you is not so much the IBD ranking as it is your ability to trade correctly.

    As a top down approach, I'd imagine that high EPS & RS IBD rankings isn't a bad criteria for longs on a short term or longer timeframe. Certainly, it helps narrow down selections. But it will not be the end of your selection process.

  4. Of course it won't be the end of my selection process. I would most certainly look for opportune entry points on these stocks using Technical analysis and mechanical trading formula's.

    I guess my real question was, are the IBD 100 stocks at the end of their runup (for the most part) or do they identify them fairly early, with substantial gains ahead? Unfortunately I can't locate an archive of IBD 100's to go back and have a look at their performance.

  5. gms


    I didn't mean 'entry points' as the next thing to ascertain. What I meant was that after selecting from high EPS/RS rankings for long candidates, you'd want to further narrow down the selections of those from positive sectors (as you mentioned), then I'd suggest you also then pull up charts and look for positive price formations, patterns, et al, as your next selection criteria to narrow down selections to the best opportunities. Just because something has an EPS/RS ranking of 90 or better doesn't mean it's a great long play today, even with an entry signal. That happens to answer your real question, because a look at the charts helps you see what stage a stock is in and what's been happening to that stock. Perhaps the stock is in a continuation setup. Perhaps it's started a decline. The EPS/RS ranking won't tell you so.
  6. Just use this :

    then pull up some charts and use TA for entry and exit points...

    Stay diversified across sectors and hold for a few days going in and out of your diversified universe of instruments.

    If scalping search for volatility.....IBD has nothing to do with it....

    Michael B.
  7. Brandonf

    Brandonf Sponsor

    I have a portion of my portfolio that I trade long and short using IBD 100 stocks. Probably about 90% long. I find it to be a good sourse of stocks that have the potential to move more than the market on good setups.

  8. I think that Value Line's 100 stocks rated 1 for timeliness is a great list.

    I bought HELE off that list below 15. SPF, CTX, and a few of the homebuilders were on the list before their big run up.

    The best thing is that the list is available free with a little
  9. You can create a relative strength screen and trade the top 20% it does not matter what is their EPS ratings.
    The IBD relative strength is a weighted average of 13, 26,39 and 52 week with a double weight for 13 weeks. You can tweak this further to get better relative strength list.
    You will get a better universe to trade. You can add other criteria like capitalization and industry sectors to reduce the universe.
  10. Would you be kind enough to email me on how to get that list?

    #10     Mar 1, 2004