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ANGEL PICK – This is a list of Stock Buys, Stock Short Sales, Covered Writes and Stock LONG-TERM BUY PICKS chosen by the Guardian. With each pick there is a precise buy point. Once this buy point is reached the pick is removed from Angel Pick Status and placed in the “Current Guardian Angel Portfolio”. Pay close attention to the Guardian’s price targets as they clearly mean something.
BASE – Viewed on a chart, this as an area that once reached by a stock, appears to stabilize from its prior trend. This indicates an equal amount of buyers and sellers are interested in the issue. An established base (a basing area being re-visited) often leads to a nice breakout although the Guardian has seen many bases lead to a stocks deterioration. A base will come in many shapes and sizes depending on market volatility. Therefore as with all technical indicators, the Guardian uses a great deal of additional research when reviewing a basing stock issue. Many factors play into each and every equation when the Guardian’s Angel Traders are involved.
BREAKDOWN - This is an environmental issue whereby different factors associated with an equity cause an abundance of sellers vs. buyers. Charts can many times provide breakdown indications. They clearly provide the picture of a breakdown. To determine potential breakdowns many factors are taken into consideration. If a stocky breaks down below a current low, a low that has been a turn-a-round point in the past, one has good indications that there are sellers with reason. The Guardian likes reason and reason is a value that no Angel Trader should underestimate. You can always buy a stock back. Unfortunately, the markets don’t allow us to sell a stock at yesterday’s (I wish I had sold) price.
BREAKOUT – This too is an environmental issue whereby different factors associated with a stock cause an abundance of buying. Charts can many times provide breakout indications. They clearly provide the picture of the breakout. When the Guardian is reviewing breakout candidates many fundamental as well as technical factors are taken into consideration. When a stock heads up to either new highs, or high points 8% off their average range (resistance), a breakout has taken place. The Guardian does not like to miss that 8%!
CHANNEL – Imagine a stock having a resistance level at $17.00 whereby the previous 3 times the equity went to $17.00 it would then go back down to $14.50 (Base) before returning to $17.00. This trading range is called a Channel. In this example the channel is between $14.50 and $17.00.
GAP – Due to supply and demand, many times there is demand for an equity issue prior to market open. News after market closes the previous day is often responsible for this. This demand creates interest that requires a market to be made, (price to be determined) in the stock meaning the market (must find sellers) to accommodate the purchasers (demand). Due to an abundance of buyers, sellers can name their price and with more interested buyers than sellers, it becomes a sellers market overnight. This can cause the stock to open up at a higher price then that in which it closed the night before. Thus, gaps are created in which even though it closed the day before at $14.50 the next morning it opens at $17.00.
PRICE TARGETS – 1st Target Sell 70% of holding: The Guardian’s upside Price Targets on stock picks are placed as an exit benchmark that many times will be exceeded by the stock. It is for that reason the Guardian has a second target which likewise, will many times be exceeded. If you find it difficult to exit on the Guardian’s recommendation remember that stocks go up and down. Odds are for every additional dollar you squeeze out above the Guardian’s exit price, you’ll no doubt lose a dollar because the Guardian knows when to pull the trigger. Remember the popular misconception of the Guardians? The investors Golden Rule? “Don’t Lose Money”! No one ever went broke taking a profit. Many times we exit at a price target only to buy the equity back higher. Many times we exit at a price target only to buy the equity back lower. It might help to think of every trade as its own trade. Understand this, when you buy and sell an issue, it is a done deal, it is over. “FugetAbowtet! The next time you buy and sell an issue do not consider it a continuation of the previous price you bought and/or sold it for. It is a new buy with a new price target and a new opportunity to benefit.
SECOND PRICE TARGET – 2nd Target Sell remaining 30% of holding: The Guardian’s Second Price Target on a stock pick is placed as an exit benchmark that will many times be exceeded by your holding. It is for that reason that you’re Guardian Angel will review current time and circumstance surrounding that issue. You will be provided with three opportunities for Personal Choice since at this point an Angel profit has been already obtained.
RISK RATING – Rated as 1, 2 or 3 with 3 carrying the most risk. Just how much risk does an Angel Investor feel comfortable with? We all realize a different degree of risk. The Guardian’s goal is to decrease risk because he in no way desires to see Angel Investors take risk.
RESISTANCE – Upper areas on a chart pattern that have been reached before. Increased selling at these A-Frame tops is responsible for the change of direction and the creation of resistance levels. Remember that the quantity of selling is relative. Every selling transaction requires a buy. Movement is based on buyers and sellers as well as volume. Volatility can often be greatly enhanced with little volume in the marketplace. EXAMPLE: Now think, buy a stock at $16.00 when it has been at $16.00 twice before in the past month. The stock heads down the moment the purchase is made and hits $14.50 which just happens to be a price it has visited twice before in the previous month (support). This creates Resistance at $16.00 and Support at $14.50 so; two weeks later when it approaches $16.00 many are preparing to sell for a breakeven believing this cycle will continue. This selling pressure at $16.00 is precisely what creates this top level called resistance. Equities either fall from resistance or breakout (UP) from resistance. The breakout is an exciting thing. Many many factors are evaluated to determine whether OR NOT a breakout or possible breakdown will occur.
SHORT SELLING – This is one very unique situation the equity markets allow investors to become involved in. As much as buy and hold is preached, (not by the Guardian of course) many equity issues can be borrowed and provided to investors. Selling Short is when these borrowed shares are sold with the profits going into the clients account. The concern can be that someday the stock has to be purchased back and replaced into the original owner’s portfolio. If the equity price is lower when re-purchased a profit is created for the Short Seller. The opposite holds true if the equity is re-purchased at a higher price.
SUPPORT – Lower areas on a chart pattern that have been reached before. Increased buying at these levels is responsible for the change of direction and thus the creation of a support level. Not unlike Resistance, the quantity of buyers is relative. Every buying transaction requires a seller. Movement is based on sellers and buyers as well as volume. Volatility can often be greatly enhanced with little volume in the marketplace.
STOP LOSS – How much can the Guardian actually say when it comes to a Stop Loss? Stop = SELL and LOSS = SOLD. Does it always mean “Sell” with a “Loss”? No. Many times a Stop will be placed to protect profits between an Angel’s entry point and first or second price target. A Stop Loss is for protection. Unless you are downright lucky all the time, stops must always be adhered to either for protection of profit or protection of principle.
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