What do you do? Short term reversal?

General
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I ran my screen this week, and these are the stocks it gives:

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But some of them have gone with 92% 62% 69% the last four weeks. What would you do? Just buy ore and wait for a short-term reversal?

I have read in several posts here that the short-term reversal effect has been much less effective in the last 10 years, so it is just a small part of my ranking.

What would you do?

For the second question, I have read Yuval Taylor’s solution on what to do when the stocks run of the day you are going to buy. Just leave it for the next day if it takes off.

What do you do here? How much would you let the stock run before you left it to buy the next day?**

And what would a run of? 5% 10% 15%?

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As much as I don’t like answering “it depends”, in truth though:

“it depends” :wink:

If you use momentum, then recent price action is a good thing. How much is another question?

For my main ranking systems, generally speaking, big moves are a good sign, it usually means the stocks are being recognized and bid up.

Also note there was a significant boost or shift to smallcaps recently across the board (which most of these moves may be related to):

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It seems that choosing the best stock over the last 4 or 10 days won’t give a drag.

With these settings, I have made two RS, one with the highest: 100*((Close(0)-Close(10)) / Close(10)),and one with the lowest.

So out of 25 stocks picked by the main ranking system, the system chooses the 10 hig+low performer for the last 4 days or 10 days:

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4 days, best gives 54%, the worst performer gives 42%, and with 10 days, the best gives 50 and the worst gives 36.

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Conclusion: There does not seem to be an argument for staying away from last week’s rockets.

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I was actually looking at this just a few days ago after we had so many stocks shooting off. Made a simple ranking system and tried to use it as a filter to stop buying stocks that had increased the most. By avoiding buying the bottom 5% in the rank improved the result in some strategies.

Will try to share it…
https://www.portfolio123.com/app/ranking-system/432947

5

Thank you for sharing. I tried it on my main RS.

How much weight did you give the nodes in your RS system?
How did you avoid the buttom 5%? What kind of rules did you use in your strategy to achieve this?

I have tried it with different settings. I tried it with 1,2,3,4,5,6,7,8 % weight. And in some situations, I’m getting 1-2% better performance.

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I have not tried it as a node in a ranking system yet. I just tried it as a buy rule filter in a few strategies -
Rating(“Pullback”)>5

Will need to do some more experiments… it’s extremally annoying buying stocks at the top, but it’s just as frustrating missing out on a good run :slight_smile: