There is a very special WatchList in VectorVest called: Midas Touch Stocks. This WatchList can be found in the Cherry Picking folder per the WatchList Viewer. The WatchList Viewer is found per the Viewers tab.

What are Midas Touch Stocks? Midas Touch stocks are stocks with upward momentum. The Midas Touch Layout can be added to your graphs like the example below for RMS.AX. This stock was the top ranked stock per the Midas Touch Stocks WatchList on 22 October 2024. You can change your Graph Layout per the Graph Layouts selection (to the right of your graph). Select the Midas Touch Layout. Once you have the Midas Touch Graph Layout loaded, set the time frame to read 3 months (click on the 3m button per the bottom right of your graph).

Per the graph above, Midas Touch stocks are stocks that have the following 3 Moving Averages hitting 3-month highs:

The 10-Day Moving Average on the Stop Price.
The 65-Day Moving Average on the Stop Price.
The 40-Day Moving Average on Relative Timing (RT).

If you think about it, a share price going up higher and higher will have a Stop Price that is moving up in tandem. Recall, a Stop Price is calculated for each share each day by taking a 13-Week Moving Average of the share price and then adjusting for the fundamentals for the stock (that being Relative Value – RV and Relative Safety – RS).

Furthermore, if RT is rising, then the 40-Day Moving Average of RT will be rising too. Recall, RT analyses a stock’s price trend. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock’s price movements day-over-day, week-over-week, quarter-over-quarter and year-over-year.

Now put it all together! What if you have a stock where the 10 and 65-Day Moving Averages on the Stop Price are rising, along with the 40-Day Moving Average of RT rising…you have a stock breaking out. RMS.AX on the 22nd of October 2024 met that criterion per the previous graph.  Below is the equity curve from RMS.AX over the last 3 months as of 22 October 2024:

On a final note, if you go back to the Confirmed Up Market Timing Signal on 19 September 2024 (per the Market Timing Graph) and QuickTest the top 3 stocks to 22 October 2024 you will note the following returns:

Next time you are looking for a few ideas on what stocks to cherry pick in a rising market, look at the Midas Touch Stocks WatchList.

PS. To ensure you lock in profits with Midas Touch stocks, you need to ensure you have strict risk and money management rules in place. When the 5-Day MA on RT breaks through the 40-Day MA on RT for a given Midas Touch Stock – this has proven to be a good time to consider closing out of a position.

 

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