Leif Soreide: Careful Concentration For Stock Market Success | Investing With IBD

okay welcome to the investing with IBD podcast everyone it's Justin Nielsen your host and Arusha Pierce he's going to be joining us a little bit later as he usually does uh my my partner in crime but joining me right now we've got Leif soreda he is a U.S investing champion from 2019 and also he um a championship trading team that he's uh kind of building up and uh really interesting stuff a lot of great swing trading lessons uh so hey welcome to the show life hey Justin thanks so much for having me uh you in Arusha I should be interviewing both of you but it's fun I'm going to try to bring the heat we're going to see what we can do we've got some uh interesting things happening in the market and I'm excited to talk about it with you guys so yeah it's been a it's been an interesting year really and um a lot to kind of cover and and unpack with what's been going on between again inflation recession debt ceiling now um you know and and just kind of getting out of the the 2022 bear Market doldrums but uh where would you like to start do you want to start with the NASDAQ to kind of get an overall picture yeah I mean I'm better talking over charts than going over the lessons you know this year it's a lot like 2019 I kind of went up against a lot of good swing traders that are doing rather well now uh you know in the US investment Championship uh this is a real money contest and and you try to whoever makes the most money the best percentage return wins uh there's a similar year is this very difficult thing and then you just have your your small runs and I guess we wanted to do a theme for this so uh I think we're going to call this careful concentration because we're gonna show how I sort of got into some semiconductor stocks and we just had Nvidia report so the ones I still have there are gonna probably benefit from that right maybe some of that move was getting ahead of that and you know some of the money was realizing this and going into semiconductors early and um and they weren't just one or two patterns here they're all sort of setting up together a lot of people buy patterns uh you know one in the group that's setting a cup and handle that might not be very meaningful because it's just waiting for some confirmation uh if if you're waiting for earnings or maybe the earnings of another company or is something to happen and not necessarily always supply and demand but when the supply and demand for the entire group uh the the the the demand is starts out stripping the supply and supplies running out and that's what I was seeing with uh semiconductors and then they all started moving out is it there's no there's not that many left to buy so and that's sort of what I want to show versus uh just looking at one pattern by itself and not considering the group yeah you kind of want to buy when it's difficult right now because it's choppy and when semiconductors were sort of forgotten about a few weeks ago as the SMA sort of slid the moving averages and then kind of popped back up so so taking a step back you know certainly the NASDAQ Composite has been the um the index to watch lately and um you know we're uh yeah you know if we take a look at that um you know we had a really strong move at the end of last week and then we he nearly gave it all up uh you know so it was kind of like a breakout that we had um we were clearing those 2023 highs yeah um what do you think of it now well it's still a very very thin Market a lot of the it's just a few stocks holding a lot of this up but the pattern is right for the NASDAQ so I mean look if you look at the cues um you know it's a lot of the same you're consolidating you're breaking out and you're throwing back it's always it's never just going to go straight up you do get those runs and this is sort of where I think I shorted apple back there actually take a match that to where I shorted Apple if you see my screen there's a yeah sort of Frozen rope idea I actually shorted there and then you had this nice move down here and then you know it's just sort of consolidating and maybe ready to to start moving now that Nvidia is going and all these other ones but then the other things that are concerning and you know small caps can't really get going we had a nice little run and I you know we had all kinds of stocks moving um but they didn't all hold so you know we're we're taking a look and throwing back a lot of them you know it's you're going fishing and see how much you can you know take out of the water or whatever right and then you know see what you have to throw back um let's see we have the NYSC you want to show this one so this is the New York uh New York composite and again a very different look from the NASDAQ I mean because you look at the NYC composite and this is this is obviously in a downtrend I mean you've got uh you know lower lower highs lower lows um you know RS line is terrible and you almost have a little head and shoulders look to it and the consolidation there and on the weekly you know you know you can see that a little bit and uh you know if this this gets reversed and negates that that'd be a good thing overall the base is okay so it could go either way uh we're gonna have to see uh this is just very thin but we're starting to see you know these kind of uh stocks move from stage one to stage two growth stocks growth versus value growth is kind of outperforming value uh so far this year but it sort of uh not many stocks are setting up and I sort of use um the minority Trend count idea that the trend template I have my own sort of version of that which looks at the faster moving stocks and that you know you want your average daily range so the range of it over maybe 20 days of you want the stock moving kind of two percent or more and then keep account of that and you see what you could actually trade and how many of those there actually are and we had about 311 or so a couple days ago dropped down to like 250 very quickly with this kind of action here yeah you know it makes it difficult you get um one I had to throw back I mean right away was Uber you know bought this sold some and it just threw it back and might re-enter just you know let the 21 catch up we'll see what that does but um you got to be a lot quicker in this market otherwise you're just going to give everything back and you get those those two risk multiples you probably want to take some off um I mean I just want to probably just get into the SMH idea here this is uh you know you're sort of having this potential head and shoulders and it kind of bounces out there sort of consolidation it's not the top of the pattern it's sort of sideways action there and this is where everybody's out and then this is kind of low volume drift in it and all these patterns we're setting up so uh you know I suppose the careful concentration idea is you know I actually bought some of this personally here coming out sort of a long term buy um because I want to get sized up and then you have lrcx well now with something like this though okay so it had a a nice kind of move and you immediately got confirmation that yes this is this is working this is going and then the last few days uh you know kind of kind of a uh a big a big give back so how are you handling stuff like that are you just selling into the strength are you are you still holding on through some of this or how do you manage that kind of position when you get we're selling some into strength for sure well I'll just skip back to some shopify's one I bought here and I bought this uh very very tight in there coming out of this little pullback and I got 2R and I sold two risk multiples on my trade so I sold some into strength then you have the option to take it off even when everything falls apart that I'm out so I'm rather quick quicker than I want to be and maybe describe those uh those risk multiples that you're talking about when you're so you you bet a dollar let's say and then it gets out two dollars it's where I'm taking the profit scale could be depending on the signal 25 percent a third half whatever you want to do uh in this environment the more the more you sell the quicker you sell the more you're gonna profit rather because it's just every the throwback rate is incredible yeah I I haven't experienced something like this since 2019 really uh but here the thing about 2021 was uh and you could ask Samir he was he's one of my members and we trade on the platform the championshiptrading.com he was uh saying he was mostly short and I was doing a lot of shorts I was doing MGM short I don't remember where I was short but sort of reverse earnings pivot I think it fell apart on earnings I don't remember exactly where but um somewhere in here and then it covered down there or something and not at the very bottom but some of it in earnings I think um and those are the best moves but this is uh I prefer shorting the bigger names like apple or something like that but but this year all the all the big Mega caps are doing great so yeah and I don't have anything to short this is a problem I'd rather you know you want to sleep at night I don't want to put a big short on some company that can easily be bought I want a short Apple that's like well I showed one of those shorts from Apple that was a while back and since then all those have been pretty good so do you ever do shorting of the indexes oh sure yeah you could do that I mean um you know xlb is my current uh short idea right this is the one uh this this looked like a short in here and of course they don't let it happen they Bounce It Out Market looks good you know Arc invest is up three percent on this backup in this range right on Monday it was 3.8 percent of Arc invest so that's when you start buying the junky stuff by Riot or something like that you know I was trying ride even um you see I bought that in there to get one risk multiple and then you're out even again and it's just uh you know it's quicker quicker than dead you know quicker than dead I think there's a movie I haven't I haven't seen it but I think this is what it's called yeah was that Sharon Stone I think I think so I think so and Leo and Leo is you know so I think we're about the same age now so um and and so with this with this narrowness that we've been seeing and again uh very very different pictures you know we looked at the NASDAQ first then the NYSE composite um so are you just focusing all your attention on where the strength is or are you sometimes looking at you know some of these weaker stocks and looking for bounces in in like the NY NYC uh or or you know some of those weaker areas with the NASDAQ getting extended you kind of shift and say okay well let me see if the strength will come into these other areas well that's one way to play it that's a riskier play in my opinion when the group is oversold then the stocks starts setting up or the one or two Lone Wolf starts setting up you're playing the bounce on it uh in this environment you don't know where the balance is but yeah you wait for a pullback see what's setting up and when when everybody doesn't want to buy them like the SMH I think I think I tried this somewhere somewhere back in here and I eventually threw back out even you know and then we're back I'm back in this one again but playing the playing the stocks that are setting up you know this sets up right so you guys had this on swing Trader 2 or something right yeah yeah so uh I mean just as you said we were taking profits and we took our first profit very quickly took our second third off uh and then we we just got out of it uh as it as it started pulling back in yeah so I saw the last half today and I was I don't know where I was selling somewhere like that you're just selling into that so so that was the first one and to get carefully concentrated you want to get a big percentage of your portfolio and where the money's going so then the next one um was AB Joe and the mega caps this is what I wanted I think it reaches off so you see avgl we got this thing going down sideways drift to the right and I love when David Ryan comes on your show he says that down drift to the right and he just simplifies it so much I'm a huge fan of his uh in this this turn here um you know it's it's risky but I risk 1.7 given the smh's move I would think it's pretty hard to knock that down when this is kind of pumping out there right so you have that you know in other stocks in the group um supplies running out it's not just really by itself um similar related stocks rather and then you go from this one and uh you know down to half position up here now they have the Apple news uh up there I used to got a big deal with Apple so I'm riding a half position uh we'll see if it's worth adding to I mean I don't add to something that's extended the pullback by would be too steep so I'd probably be stopped out if it went back to even but you know you get 5r on something risk multiples on something like that uh move on to the the next one I'm doing ACLS went a little riskier you know to get this kind of down drift flush on earnings I think this is earnings here so I'm never mind my marking there and um really slipping the prior High there because you got to get make sure it's kind of coming out there would have rather bought it right off the 50 but it just got a little extended there with a stop somewhere down there and sold the sold 75 percent of it uh into that so you know trying to try to keep a positive Equity curve and you know then the last one you buy is always You're always worried it's the laggard and this is the one I bought last and it's obviously the closest to getting stopped even right but you know instantly selling some into strength and moving the stopped even and with the Nvidia news maybe this just maybe that's its own pullback buy right and just add to it coming out there so and how long would you say that you're you're holding things in this environment and in terms of days weeks um you know something like two weeks or something you know it's been really difficult I mean I'm I'm a trend follower at heart I mean I really want to buy this and let it Trend and you know go from to the next base you really I really just want to Target the next base move on to the next stock you know let it base out uh I think I was going over Celsius today that's something to um you know somebody's asking about this you know this just needs a whole nother base and you know there's areas we targeted it as a high tide flag here that's the next base you know you kind of sell into that let it base and rebuy right and then yeah sell into this and then let this base and you know this is a really deep base I kind of avoided this whole thing uh this is tough up here so this this was nothing to get involved with for me but um it's just when it makes these big moves you can always get back on so we're taking pieces of it that's that's really what I'm trying to say is we're going to try to get the move the the bulk of the move and not worry if we kind of miss out a little bit um in this environment most of most of the time it throws back the throwback rate is very high so yeah and by the throwback rate you mean the things that are coming right back into yeah right back where you bought them or you know yeah round tripping you know dkng is one I think I bought it a little lower than my circle it's trying to buy this and this is for some reason my most popular tweet I said this is a three-line strike as if there's some kind of magic to it and there definitely isn't it's just sort of a a bullish kicker but then you got you know way out there so I sold some of that and uh I took off a piece back it even because I still think it's got a chance and you know see if this can go sideways and maybe add it back but I still like this one but it really just should have been in Nvidia the whole time yeah yeah right especially after uh it's well I mean we'll see what happens uh uh tomorrow at the open but certainly in the aftermarket uh the earnings are you know looking looking pretty strong I mean oh geez it's up even more last time I looked yeah I suspect it'll be up in the morning so I think this will be you know that would have been a good play uh I had this on watch uh in here and then here and this is a little little Short Stroke type one there that I don't really buy those typically but the institutional support for this along the way you have all this up volume and it's very very tight this is what I call low tide flag it's the play on O'Neill's high tide flag you know I'm not trying to invent things or whatever I'm just an observer but I'm going to call it call it something you prefer in a leader you get you know 60 or more in uh you know eight weeks or less and then it makes it rather a rather tight area here so this is your sort of low tight Flag Zone and um you know in a leader I think that's good the the problem I had with it is it was a quick shot back to highs up here yeah uh versus you know so you're sort of maybe in need of a handle uh but you know there there's money to be made and uh if you're lucky in that one so well let's take a break oh yeah I was just gonna say let's take a break real quick um when we come back we'll have Arusha join us and we'll also get a little bit more into uh some of the principles of this this concentration um careful concentration that you use um and also some of these other uh bases that you uh talk about and and patterns so stay tuned hey Trader with inflation interest rates and the recent banking crisis are you nervous about what's coming in the stock market if you're ready to take control of your trading and forecast Trends instead of reacting to them then Vantage points artificial intelligence is for you did you know Vantage points AI predicted the trends of all the collapsing banks weeks in advance visit www.freestockcoaching.com to learn how you can predict Trends with up to 87.4 percent proven accuracy visit www.freestoccoaching.com that's www.freestoccoaching.com welcome back to the investing with IBD podcast it's Justin Nielsen here and guess who joined us it's Arusha Puris so he's going to be here for a second segment Arusha of course joins me every week he's one of the portfolio managers over at O'Neill Global advisors uh how you doing Arusha I'm doing well I'm very excited life is on I apologize to life for missing the first segment here but yeah you you caught the tail end you got you got the juicy stuff um yeah so of course our our special guest this week is Leif serada he is um in 2019 U.S investing Champion also the founder of champion team trading um so let's let's get right into it kind of you you really touched on this in the first segment this idea of careful concentration and uh it certainly seems like the chips have been one area to to do that and you know look we don't know what's going to happen when this when this actually comes out with Nvidia but right now in the aftermarket Nvidia earnings are you know they're they're going up quite a bit so it looks like up uh you know we closed the 305. it's trading at around 385 now so up about 26 um that's probably going to be bringing up a lot of the the chips but you know Nvidia is certainly in the mega cap you know things that have been working that very narrow pile um and you've been talking a lot about how quick you've been taking your profits at what point do you feel like we're going to start getting to the oh you know what it's worth it's worth holding on to these for a little bit more because I mean Nvidia has had you know quite a move um and it just keeps on going so when when do you know hey I'm gonna I'm gonna hold on to something for the bigger gain as opposed to these quicker shorter term moves right well pretty much it's we're going to keep the same Playbook taking those quicker profits and it could always be quicker and you know I just I just had a DK and G out I don't know 10 or something and I didn't sell at all I regret that so whichever way you have the case of regrets keep playing it that way so I wish I sold it faster this way okay so it hasn't changed yet uh Nvidia is pretty much the only one you know elf is one I do have a case of the regrets of this one I try to buy this in here and I stopped for like two percent and then this thing ripped so you know but that's the one or two leaders and this one's doing great after hours too 15 unbelievable right so Health but they're not all perfect I think snow I just saw go by is uh yeah down here somewhere and this one's uh part of the uh you know stage one to two uh transition a group right there's a lot of these transitioning all the old software names we'll see if these can start going from one to two but you know once they start trending and stop throwing back uh you know so too many Throwbacks the Throwbacks are everywhere in um just maybe I'll just jump into melee off the top of my head we were talking about this one yeah so this is kind of the idea of this is one that you've you've played a number of times so you keep on going back to it and and what what's the reason behind that well if you see the the chart here first of all the earnings uh it's got a good base and you know it looks like it's transitioning on your stage four one and maybe it's going into two so now that the trend is starting to look okay so I want to play an earnings pivot and I and I trade on earnings a lot uh after earnings so I don't gamble into earnings I see a beat and raise uh and then I'll buy it so this one specifically was trading about 1200 in the aftermarket uh on earnings and you know this is pretty much your standard you know you could say this is the cup and then this is a little mini handle here right so I like to fish the low and a handle and pull back by it over some prior high and on earnings it's meaningful it's not just a random take out you know like something like right there right um if you can zoom in if you're if you're watching this on the on the treadmill you're not going to see this on your phone but the idea is I'm fishing a low in this uh handle to the overall cup and as I'm taking out a prior High I see the excitement at 1200 and then it pulled in and then it kind of uh based a little bit during the day an intraday bases are important too A lot of people don't get into that I could do a whole segment on that where if you're up three percent on the day to your buy point and then you're buying it you're probably it is straight up uh it could work but your odds aren't as good as if you're kind of basing around your buy point then it kind of breaks out like at your normal base right yeah so so like let's get let's first get into like this earnings pivot are you so are you are you buying within the so so you have the earnings day you have that earnings bar are you buying within like the next day you're buying within it I'm buying so earnings were overnight so it opened it opened uh I think it came straight in and then it turned back through the prior High that's where I'm buying this so the day after actually the earnings day okay yeah so so earnings came out it opened and earnings were out so it opened higher I think it opened higher and then open and then came in and filled the Gap and then and then and then came inside the prior bar and then I bought it when it turned out there okay and it took out winning the highs of the price took out the prior high so that's my technical guy uh oh method there uh and then I'm selling into this I'm selling it a strength and then my signal changes it throws back uh I think I'm out somewhere like there and then I'm buying this next turn because I'm trying to get involved with this stock because I think it's holding up now and then I'm selling into this and uh it was trimming down into earnings in this earnings pivot this is earnings over here also yep right open hiring lasted straight through it so there's nothing to do and then the last piece I think my stop is something like there on the last of it but still still profitable and you know trying to sell some up up in this range uh before sizing down into uh get a double inside day after so I'm out again and then double inside day turn I'm back in I'm selling some into that and then throw back you know your option to stop even uh and then I'm looking for maybe another turn so it's just you know the constantly trying to make sure I don't ride something down to the 200 day I have to get out right this is where you can't slim down there is it you know all the can slim Traders are out uh so you know including myself on a little earlier but um you know that's that's a tough one there so go ahead oh no well are you taking a look at the characters of stock too because this has always been kind of a choppier stock versus some others that might be a better trending type of sod yeah it shows it's maybe a little sloppier that it can do that but I mean overall the 50 days holding all for uh but you know one one or two days there I can see if the closes below there but you know you want those stocks that Trend really well and show that institutional support like in video it's just riding the 21 EMA the whole way I mean that's real support yeah something really going on with this one and then you get that blow off in hindsight it's uh you know not not unexpected but in real time you're you're back to Prior highs you have this straight straight up move um you know I I put slight odds it might not might not hit and might go back to the 50-day or something so the semis were throwing back and you know you get something a quick sell-off and then you know now we're back up here after hours SMH is trading somewhere around there so yeah about 137. so just I thought I was gonna get kicked out of this one and all the semis right uh you know you get this Nvidia to boost it and maybe maybe you'll have to take some profits in it we'll have to see what it looks like but um let's see if everything else starts forming up and can you kind of address real quick because you you mentioned SMH having a position there Nvidia um and a number of some semiconductors so with your idea of this you know this careful concentration that that's a lot of stocks so how big are your position sizes in these stocks um are you going like basically all in on semis or uh do you have other things uh kind of balancing out yourself I'm trying to do you know coming in uh from small invested I'm doing like 10 but you know you add the estimation you can get you get pretty fully invested very quickly doing that you know but I'm talking about you put your whole net worth or something like that um you know it depends on what kind of what kind of risk tolerance you have I don't want to tell anyone what to do but you could that could be your whole account or even on margin because you're carefully getting in there you get four right in a row uh you know the first one the second one and the third one you're moving stops um of course you know anything could happen you can Gap risk you know you have the debt ceiling thing and all that something could go wrong uh and then you know your gap down here and you're in real trouble but you're carefully getting in at least to adjust your risk as you go with your positions that's that's the important part mm-hmm um and and so are you um right now how how spread out are you into different sectors right right now I'm just basically there with uh dkng and I think that's about it uh not not much so pretty concentrated there but uh not fully invested because I've been selling the partials and uh you know making other other slight mistakes too like I've been trying to get into Zillow you know every time I buy some turn you know I throw I throw it back for you know one or two percent or something like that so and there's some little paper cuts here and there uh when your signal changes of course you're gonna have to adjust um but yeah there's we had some of the I think some of these uh biotechs set up so we got something like bmea but you can't put your whole account one of these or even be too big right this kind of stuff you can end up gapping down at 10 bucks but you get a 30 move and then I'm out here and this is almost that three line strike today I think this was almost within a penny of taking on a low and then you're getting some kind of a turn so sort of a cup and then a little handle here so some power and some some biotech so I think you know everybody's talking about artificial intelligence and Ai and I think uh xbi might be a play on that also but I think a lot of the banking issues um you know biotechs have to raise a lot of money uh so the smaller names are not that safe if they can't raise money you're you're also kind of describing some some different different patterns here and um you you did give the example of the low tight flag um do you have any other examples of that just to kind of um flesh out exactly what it is that you're looking for and the uh the look of that yeah I mean it's just a something has a lot of power like a high tide flag so Ford was one that's just not quite as much yeah so I mean it's a leading stock it's trading really orderly got a little choppy this looks like a lot of Traders uh playing around with things and then uh you know I want to see everybody flushed and then I'm I'm buying it in there bought it this day and uh you know I wanted to hold for a bigger move but this just kind of dropped out and was selling some into strength of course but this this had that that kind of power to it um so so life when when it kind of emerged initially kind of within that base uh up to 21.49 what would that have been another place that you might have been tempted or or would you have looked at that and said you know it's probably a little too early uh yeah it's a little early so part of the low tide flag it's not a high tide flag which is three to five weeks we want to see in the flag so I like to see a little bit of a longer base okay interesting and that's the same with the rocket bases this sort of stuff I uh I'm not trying to invent anything it's just my observations when I have something like bmea I just showed um you know even riot you probably need to change the wrong Year sorry that's uh not a good spot there obviously so yeah this one yeah yeah so so describe what you mean by rocket base well okay so it had the high tight flag power this this quick pole the rise right is uh over 100 in eight weeks or less and then the drop is over 25 so all I'm looking for is just another base I'm not inventing anything new so we just want to see a base coming from that power with uh less than 50 you know less than 50 percent decline uh after the poll if it declines less than 50 I want to see six to ten weeks and there were there were some stocks um 2020 where we did this we bought the rocket base like I think yala because Samir reminded me of Yale he says look what's back something I if I go back maybe I go back like 2020. do this I'm gonna get lucky here maybe one point yeah something like that here I think we yeah we're buying this one yeah I don't remember where but this one up 100 in very quickly uh you know and then it's just all these stocks just went away so right yeah so like I think Yale is a good example of okay you see this stock going up like a hundred plus percent yeah but where especially when you're newer to this it's easier to I mean it's pretty easy to let these things fall off the radar right and all of a sudden they take off again like oh my God that stock that was running up you know two months ago is taking off again and I missed it again how do you kind of stay organized to really track these so you get in at those kind of optimal times well I'm not looking at any of this stuff really that is it's not in Trend and I'm using this idea of the minute of any Trend template I'm using the stocks what that does is sets up stocks and proper bases the right size of the basis will be right uh you know going back here and you could be very sloppy with your buy points in 2020 and I think I bought fubo you know just on a pullback buy here in a high tide flag all right and this went 100 in five days or something like that we sold right into that and so well now when you have something and because again I remember that that fubo move um I think there was there was news happening you know and uh I I did that have to do with like gambling uh maybe yeah well they were working on the gambling thing yeah yeah so when when you have something that's news related like that um how do you kind of handle that because you know especially with something like that where uh it was like oh everyone was so excited and then it just kind of dropped Like a Rock you're taking profits and moving up your stop and you know as it turns around on you got to get out taking out the lows with something like this uh then we're using your basic chart pattern and trailing stops and we're not worrying about the news and something like this I'm looking at the volume really too you know you have your this is your dead volume spot right there I can just see on the chart based on you know from right here so that's meaningful on the pullback by I want to see a kind of low volume area and this is you know it's all very elevated here you know from what we're seeing but for the most part in a nice orderly neat textbook pullback you're going to have that that low volume spot and that's when the turn is Meaningful in my view most of the time if everything is setting up for the stock and the group looks good so that's just something to think about um and um one of the other things I just wanted to kind of address real quick um you know we're covering a lot of charts here today folks so uh certainly if you if you are listening to this you might want to go and check out the video because uh life is you know he's he's taking control here he's marking a lot of stuff up showing exactly where he's buying these and and some of these patterns that are a little bit different um so that can always be found at investors.com podcast and then also life I wanted to give you a a chance to share where people can follow you uh as well because you're you're pretty active on Twitter and what are the best ways for people to kind of follow you and Twitter yeah at least Serena that that's my Twitter handle at Champion teamtrading Dot com that's my website where we we have a group of traders that trade these type of setups basically yeah you know let's try to swing trade aggressively looking for powerful stocks and uh you know a lot of the energy stocks were setting up in the last few years and we're starting to see the you know riots setting up this has some type of a rocket based look to it it is back in some Supply uh from you know 2022 I think but it's got a lot of power with Arc invest up 3.8 percent on a day when you start seeing those kind of moves you can get stocks like this to really really go so you know I think there's we're starting to transition to maybe a a bull but it doesn't mean they can't shake everybody out first right you know if they're not going to make it easy but that's why I kind of want to go on a podcast and sort of a say you know hey if you're interested in this type of stuff come see me and um it's always cool to be invited thanks for having me yeah so when we come back we're going to talk about some more of these stocks I mean we've already covered a lot of stocks but we're going to talk about some more setups that life has got on his radar so stay tuned we'll be right back hey Trader with inflation interest rates and the recent banking crisis are you nervous about what's coming in the stock market if you're ready to take control of your trading and forecast Trends instead of reacting to them then Vantage points artificial intelligence is for you did you know Vantage points AI predicted the trends of all the collapsing banks weeks in advance visit www.freestoccoaching.com to learn how you can predict Trends with up to 87.4 percent proven accuracy visit www.freestoccoaching.com that's www.freestoccoaching.com okay welcome back to the investing with IBD podcast it's Justin Nielsen here your host along with Arusha Paris a portfolio manager over at O'Neill Global advisors who joins me every week and our special guest this week is Leif sarada he is a 2019 investing Champion U.S investing champion and he is also the founder of championship team trading so um in this segment I mean you've already covered a lot of stocks so maybe we can start by just acknowledging the fact that a lot of the stocks that are on your radar are stocks that you've already traded and you're just waiting for a chance to get back in oh for sure I'll just jump to Uber real fast and you know Uber is one I I got in sell some into strength and I'm already stopped out on it so you want to say hey what am I watching I'm watching is the same stock I'm getting back in this watching this round out you know if this is the uh the cup this could be the handle it's above the 21 EMA there's nothing really wrong with it yet we're going to see if it sets up I mean I'm gonna go back into it and you take the little piece and you got to give it back that's the choppy environment we're in as a news driven uh you know choppy environments are you have to throw them back fast or you could maybe you have to ride them back down to the 200 day which is going to be expensive so so like what what are you looking for so so you got you got stopped out of it what are you looking for from Uber to do again uh to make you interested to take another shot at it well it started to kind of pull back on light volume yeah the market got a lot of the stocks were kind of roaring at the dkngs you know I'm getting some of these to move all the semis are moving so I'm getting more comfortable I have some gains to spend I can risk it down to the low but you know once everything throws back I'm adjusting the stops to even uh because I'm putting too much risk on to round trip myself on everything sometimes you have to get far out there on the risk and and hope they continue but if they all come back on your head you're gonna you're gonna have to pull the the emergency brakes on that one like this and then just have to let it go to the side there set something tight and then maybe some kind of a pop-on volume look for that with a 21 EMA support um or even 50-day support maybe this just needs to set a you know six week base or something with a 50-day catching up however that looks the moving average support is good so you know it might improve the pattern here and it was a little bit you know straight up on earnings and it's a pretty heavy stock you know you have 76 billion market caps so takes a little bit of money to move it around and to get back in Trend we do need the market otherwise these breakouts aren't going to work very well so when the market comes in the SMH throws back and now that it's decided to sort of break out again all at once because of Nvidia um we're having this uh kind of wild Market on our hands yeah so you mentioned the market cap of uh Uber being up there at you know 76 billion uh do you have uh certain liquidity requirements I know when you were talking about your minervy minervini Trend template you know you you put in some extra liquidity and price uh elements what what are your typical liquidity yeah I like to see a 200 000 uh shares 200 000 shareman average daily volume which you can see at the top of the screen up here so this is 24 million so that makes it and then you want to see you know I want to see a billion plus and in this environment it's smaller is not better okay if we want to see so we're going to prefer the bigger ones but you do have to have your minimum requirements uh you know in great environments like 2020 uh smaller cap once they're going to move like nvidia's move and maybe a couple days you know so that's what I want to see that's what I'm I'm licking my chops for is just to get maybe some of these banking issues resolved and um you have the FED start easing which may happen in November and we'll have to see it's not a prediction just at some point that's probably going to happen and you know get the the wind in our sails in the small caps and then you get those stocks like I showed fubo up 100 in five days and right real big institutions coming after the smaller names versus hiding out and being chickens in the uh apples and other ones like that for safety because they're not going to have problems raising money and they'll be around Microsoft they'll be around most likely Google and such so those are the ones that are performing now but um I have some early signs that it could be switching but you know the we're not there yet we'll have to see yeah well and certainly the recession fears have been you know really big on people's minds and this earnings season I feel like you know maybe those got exacerbated a little bit a lot of attention on the guidance uh going forward a lot of estimates not looking as great um so maybe we could kind of circle back to your earnings pivots uh and and you brought up Churchill Downs as as one example um chdn and uh maybe walk us through exactly what you were looking for on this one and how you how you got out of it too and what you're maybe waiting for for it to set up again so for something like this I thought the group was doing pretty well gaming was doing well and now they're all sort of lose the moving averages and such as this sort of rolls over but uh you know this is I guess they got legalized gaming they have Kentucky Derby a few things like that I'm pull back buying this in here and then going into earnings I have very little cushions so I'm trying to get out as close to even as possible uh because I don't want to gamble in case they report something terrible and I'm I'm down there so I'm really buying after earnings and this would have been an earnings pivot if it had opened inside and then pushed through here so the fact that it was yeah what is your tolerance so because it gapped up through that about one or two percent higher I could I could still buy that this one just trades a little bit thin uh from what I was watching in here so I didn't want to chase anything here if I hit the buy button I might be buying up there or something um depending on how it moved but you know that would have been Bible at that point and um you know that the strategy is to buy that coming out after earnings so you you get to see the cards you know it's like playing poker and everyone flips their cards and it opens inside and comes out the beat and raise a huge guidance uh that's what I'm looking for that's what I did with Melly um despite it kind of pulling inside but the turn I'll still play it if I liked what I saw with the numbers uh you know and then the third day I'm probably just selling out most of it and to for people that have you know their longer term investors you know if you want to get a look at the the future of the come company you save a piece you know that's or re-attack it you know you can just wait for this to base again and add it back but what we're doing is we're taking off that into strength and trying to find something else that's breaking out is doing the same thing and that could be you know you go to something we found something like like a pen uh PN here this was not the same date or anything but say this was coming out the next day and you see this uh going into earnings consolidating and uh you know breaking out there and we're selling more in the strength up there if that works and then trying to you have to learn that lesson the hard way uh where where you round trip like maybe early on in your career rounds yeah well one of the things to do I mean you really just got to sell it all uh in 2019 when I was doing the US investment Championship I was running out of time to get any returns so I didn't really have any great returns in the middle of the year so in the last two months you have to sell it book it and then find another one that you're getting right you have to get a few in a row and that's that's that careful concentration that I was saying you have to go say you find a theme that's working a bunch of growth stocks or it could just be all of a sudden you find the growth is breaking out they're all working um then you have to flip in and out of those you know at your target risk multiples and percentage gains if it's 15 in 2019 I'd just take 15 rips and sell out so it would be something like this you know you're buying a 289 and trying to sell out 223 or something I mean that it's not easy to get the top but if you get a few right uh it can it can help your returns obviously so yep okay and and just rinse and repeat right and then yeah we're getting into some other ones you're going to bsy you know this is uh you know has this sort of ECP look to its marks of ECP is this little slash slash it's kind of tightening but yeah tightening to what I mean I don't think this is necessarily a supply and just real quickly just to identify the term vcp of course as well volatility contraction pattern it's uh yeah the uh it's just a I think Marx's uh characteristics of a tight area so just tight areas are just running into earnings sometimes and they're not ready to break out without confirmation that's what it's waiting for so I want to see that earnings pivot I want to see that break out on earnings this is just if you buy anywhere in here just gambling and earnings it could be opening down below the 200 day so uh you know I want to see some earnings some good earnings beat and raise um and then Mellie so I did hold through earnings after you know I got back in here and I was holding it some into earnings here but you have to adjust your sizing because I mean things get crazy on earnings as you can see it did kind of open higher but it could have opened down here and they you know they get out of County Fraud or who knows I think it's a good company they're reporting good stuff so uh that's what I'm willing to hold into so it's just something to consider is don't get too caught up in just the pattern make sure it's not just flopping around waiting for some Catalyst which is earnings mostly so I think the earnings really drive the move so and in terms of your selection um are you are you comfortable with adrs the the international stocks that are trading on our exchanges um you know do you have different requirements there when it's uh when it's an international stock so I will go into adrs on special occasions so you know foreign stocks are okay uh but you know we we prefer usa-based you know NASDAQ NYC stocks so well for another I mean you had a lot of the the Chinese stocks you know that were that were doing well and then they were just thrashed especially when there was the whole de-listing thing going on uh so yeah um I guess that there are sometimes those geopolitical things that you have to deal with yeah I I don't trade I don't trade Chinese stocks okay and and you know for for a lot of people that's fine because there's there's plenty plenty of fish in the U.S market uh to deal with um yeah and then um just to kind of tie a bow on everything here um you know again we're we've been we've been talking about the earnings for NVIDIA we've been talking about a lot of the chips uh that you have and um are there I I guess how do you make the decision of okay I'm gonna go I'm gonna go a little bit bigger with the ETF SMH um or I'm going to go a little bit bigger with uh the leaders like Nvidia or I'm going to start with some of the stocks that are Now setting up like the asml so how do you kind of shift your money between uh all of those different buckets I guess well I'd always prefer the leaders to an ETF it's an ETF just a quick way to size up and risk manage without you know having that single stock risk choppy environments sometimes there is the way to go but you know you get lrcx this was I'm trading very tight you know it's through earnings a good RS line kind of low volume right into the buy Point um and then selling into strength but you know SMH a different look to it is you know kind of hanging out down here for most of that um below the 50 day and then lrc act is on top of the 50 days so I think this is a better a better buy but you know it's a it's that careful concentration you buy a little here a little there you're moving your stop uh versus just throwing it all in at once and five percent stop your whole account is out you're out five percent you can do it for more carefully and bet those uh the little gains you get along the way so that's that's just the best way to do it well life uh it was really great having you on the show this week um yeah thanks for having me yeah and and we'll definitely I'm sure I'll be hearing more from you and maybe we have to have you on next earnings season to talk a little bit more about these uh earnings pivots and uh you know get through a lot of those there's all kinds of fun to be had with earnings pivots so you have to be fast though because anything can happen you know that's true you got to be quick and they'll jump all over the place perhaps but and jump away from you like the a w did right I mean that one just jumped away from us this morning so interesting yeah yeah so um definitely appreciate you sharing that and again uh folks can be you know uh following you on Twitter at life Serrata tell me the website again it was championshiptrading.com it's uh my my trading platform where we showcase all these ideas and stuff and uh try to improve and come up with all you know all the Best Buy points and you know find what's setting up I mean that's the important thing and okay uh and that'll wrap it up for us this week uh next week it's going to be some wee time arush and I are gonna be uh looking at the markets and kind of deciding what's uh what's going on what's setting up and uh how to manage as we continue with the debt ceiling drama the inflation recession and uh you know the FED raises so we'll we'll tackle it all again next week thanks a lot for watching us this time we'll see you next time [Music]

Channel: Investor's Business Daily

Views: 8,789

Keywords: investor's business daily, stocks, stock market, investing, investment, investments, invest smarter, investment tips, investment advice, exclusive stock lists, stock list, investing data, stock market research, financial news, business news, business, stock, stock market news, stock news, ibd, trading, stock trading, trade stocks, learn to trade stocks, stock trading advice, stock trading tips, Careful Concentration For Stock Market Success, Leif Soreide, Champion Team Trading

Id: BQ2lLzDQQt0

Length: 50min 25sec (3025 seconds)

Published: Thu May 25 2023