Battle Plan Trade of the Week: 99 Cents Only Stores Climbs 10%
It’s been a few days since the Battle Plan has produced quality trading opportunities for our paid subscribers. But in our recent trade involving 99 Cents Only Stores
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PowerRating), it felt like the Battle Plan was making up for lost time. We added the positions as a long trade in our model portfolio on November 24 and were locking in gains of around 10% by Wednesday morning.
We spotted NDN on Monday, the second, follow-through day in the S&P 500 and Dow industrials. On the Friday before, while most stocks were moving higher, NDN was selling off aggressively, even dipping below its 200-day moving average on an —intraday basis.
In the context of the broader market strength, this pullback was especially notable.
As of the close on Friday, NDN had a Short Term PowerRating of 8. Our research into short term stock price behavior since 1995 indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. Armed with that Short Term PowerRating and a 2-period RSI of 1.00 — an extremely low reading, NDN was ready to move higher.
As I noted above, we added NDN to our model portfolio on Monday, taking a position on intraday weakness that day at 9.15.
Some days it takes a little while for buyers to re-enter a market. That was not the case with 99 Cents Only Stores, which closed higher on Monday — the day of our entry — and followed-through to the upside on Tuesday. As of Tuesday’s close, NDN had reached our exit target — a close above the 5-day moving average. As always, in the Wednesday morning Battle Plan, we alerted our traders and subscribers to this development, and encouraged them to take gains on or shortly after the open.
From Monday’s entry at 9.15 to Tuesday’s exit signal at 10.16, NDN had gained more than 10% in about a day.
Not every trade in the Battle Plan will work out as well as NDN did this week. But if your trading has gotten tougher over the past weeks and months, then consider a free trial to our TradingMarkets Battle Plan. Every day we’ll provide you with incisive, before-the-bell commentary and analysis on the day’s markets to help put your trading in context. We’ll give you suggested entries and exits for trade opportunities that may be only hours away. And we’ll give you what many other people can’t: model-driven percentages so that you know the historical win rate going back to 1995 for every single trade idea—