NFTRH+; Tax Loss/Jan. Effect Examples

Understand that these are just two stocks (without highly liquid volumes) that I am interested in for my own reasons and there is a market full of others out there.  So these are not recommendations but rather, examples of charts that I look for at year end.

OncoMed (OMED) is held in the IRA as a sort of lottery ticket speculation.  I bought it a few weeks ago at just above 19, rode it up and am riding it back down currently.  While I sold several other items on the market bounce, I decided to keep this one because little has changed since it was driven to the 40’s last year by a news release that I considered fundamentally valid (for a very speculative specialty pharma/biotech stock that is).

OMED was a newly public company that had spent all of its post-IPO time declining in 2013.  When it made the little yellow shaded pattern and considering the tax loss selling angle, I bought it as a speculation.

Then news (CELG buying into OMED’s pipeline) drove it to ridiculous heights.  I sold it and have watched it ever since.  Some fundamentally negative news came into play as clinical trials were put on partial hold and the hold has since been removed, yet OMED remained far below the levels of the giddy and frankly stupid highs earlier in the year.

It recently made a move above the SMA 50 and a trend line and has been dropping to test this level.  That is the type of situation to look for; a stock in a long, gentle downtrend all year long, killing holders into tax loss selling season, with a potential  to make a bottom.  FWIW, and again, this thing is highly speculative and not a recommendation.  It is an example of what I am looking for.

Using this as an example, a stop loss could be set on a break below the SMA 50 and the green line.  OMED by the way, has an onerous bid/ask spread, which is all the more reason not to touch it unless you know and like the story.

Click chart for large view

Control 4 (CTRL) was a disppointment earlier in the year as it was tried for a trade based on what looked like a little bottoming pattern.  It wasn’t.  I kept it on radar as well.

The maker of admittedly hyped ‘internet of things’ related home automation systems was driven higher on better than expected earnings a few days ago.  It is now settling down into some Fib levels, with a 62% retrace (around 14), if it gets there on the consolidation, looking like a good risk vs. reward on a stock that is fundamentally performing after having declined from head spinning heights at the beginning of the year.  It’s a tax loss and January effect candidate.  The stop loss in this example would be below 13.50 as adjusted to suit individual risk tolerance.

Click chart for large view

If you have any ideas please let me know and if they look interesting, I’ll chart ’em up.  Remember, it is important (IMO) to look for items that have gently declined for most of the year and look to be setting up potential bottoming patterns.  There is too much noise built into items that have been highly volatile.  We want something that looks like it could wake up from a slumber as opposed to something that looks like it has been driven crazy all year.

We’ll call this general post about tax loss/Jan. effect candidates an NFTRH+ idea because I would like to make that aspect of the service a little wider, to include discussions like the above as applicable and not just micro managing individual stocks or ETFs.

A reminder that chart based NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted.  They are meant as a starting point for further research if interested.

Fundamentals-based ideas are also provided for your further research only.