The Fab 5

There are several approaches that one can take when interested in a stock trade that involves multiple stocks (and/or options). There is the common Pairs Trade concept, but the one I want to focus on today the Basket of Stocks approach.

Have a list of stocks you like, but no ETF to accommodate? Then this is for you. I currently run one strategy that I call my Fab 5. If you follow me on twitter or StockTwits then you likely already know this information. I have updated my basket list today by removing CXO and adding HANS.

 

The goal for the Fab 5 is simple: make a run at the 100 price level (the 100 Roll). The requirement for entry is that price must be above 90 to be considered.

EL (Estee Lauder) was the 1st member to achieve the “100 Roll” and continues to hold the post-earnings gains well. CXO (Concho Resources) was the 1st to be added in place of EL and has since achieved the 100 Roll status as well. GS was considered several times but is now over 100.

The newest member is HANS (Hans Natural Corp) and looks very promising here.

For a look at current charts on these and many other stocks you can visit Chart.ly

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