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Oct 31

Entering Long Burger King ($BKW), Starbucks ($SBUX), Discovery Comms ($DISCA)

We have three new signals tonight representing the staples of American culture: Fast food, coffee, and TV! I did take a look at Coca-Cola ($KO) just in case, but it’s still got a lot of work to do to get me interested. Here they are:

Burger King ($BKW)

$BKW staged a strong breakout this week following its earnings release, having been rangebound for the last 4 months. The breakout itself on Monday couldn’t quite take out the all time high close of mid-June, but it did with its follow-through and that’s the part that impresses me most, that high tight consolidation, and today’s fresh closing high gives us the trigger for an entry. I think we can safely use the 10/18 daily/weekly close of $19.18 as our stop, with the 200-day MA in close proximity. A further consolidation or resumption higher from here could see us quickly move that up to around the $20 mark.

AlphaCapture

 

Starbucks ($SBUX)

This stock is still in a monster trend and it’s a travesty I haven’t been involved until now. (Major internal inquiry underway.) Regardless, this was a great performance today, gapping lower at the open and recovering steadily all session to finish at an all time high. The 10/9 close of $75.26 is also a very comfortable stop only 7% away.

AlphaCapture

 

Discovery Comms ($DISCA)

This is another stock that has trended very strongly, and with today’s high-volume earnings-fueled advance has broken out of its most recent consolidation to an all time high close. For our stop I don’t think we need to go all the way to the ascending trendline pivot of $77.93 from 10/9, I think we can safely use the 10/15 close of $79.12 initially, with the 20 and 50-day MA’s just above, and the 200-day closing in behind. And don’t be put off by some of those gap-filling dark candles in the last three months, clean it up by switching to a line chart, take off a couple of MA’s, and what do you see? It’s the same data, the same stock, but now the path and price trend is even clearer.

AlphaCapture

AlphaCapture

 

 

 

6 comments

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  1. Jim

    Jon,

    I was just wondering what makes your systems different than traditional trend following systems. I know most of the big names in the game that are LT trend followers are getting hammered relative to the market averages and you are quite successful.

    Are the primarily focused on futures markets and not individual equities?

    1. Jon Boorman

      Yes, futures. You should read ‘Following the Trend’ by Andreas Clenow, he details how there is very little difference between methodologies, it’s the asset mix and risk/posn size that is the most significant variable and recreates the equity curves of many well-known managers based on that.

  2. Duane

    Jon,

    I just recently came across your blog and I find it very interesting. I want to learn more about your process. My question is, do you consider buying options on your stocks? I would be able to take a more meaningful position if I used options instead of the actual stock. Any suggestions?

    1. Jon Boorman

      Thanks Duane, I don’t currently use options, I highly recommend following Greg Harmon if options is your main area of interest. If you want to understand more about my process you can find answers to many typical questions in my FAQ page.

  3. Ami

    Are you still holding on SBUX?

    1. Jon Boorman

      Close below $78.71 is the stop, so far looking likely to be triggered today (12/10) for tomorrow’s open (12/11).

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