August a good swing trader's month

It's a July to forget. Remember as an active investor you are very similar to a hedge fund trader - and especially so if you use derivatives like CFDs or options to profits from stock rises and falls.

Well what kind of month was it for hedge funds then in July. Guess what? 'It's a July to forget'. The trouble is finding trends (if like me you are a trend following investor). Remember the swing trader is looking for, say, a 25% turn in the underlying stock over 3-4 weeks and turning that using leverage into a 75% profit. (Of course you are not right 100% of the time.) Among US stocks trends remain elusive for my options trading.

Let's look at some key UK players and what my take is. Despite the rise by ICI, I need it to break 240p before I am convinced a new trend is in place. RioTinto I mentioned a couple of weeks ago, it's short-term trend remain in place upwards. It's a nice classic swing mover - look at it on ADVFN.

By classic I mean that an exit can be placed clearly because each day it makes a new daily high and does not move below the previous day's low. So you can set a tight stop-loss at the previous one or two day's low. Remember, tight stop-losses means greater profits.

Antofagasta, I also mentioned a couple of weeks ago and it too looks like resuming its trend upward again. Add to that Xstrata. Carnival has turned, and whilst the current rise is likely to have a dip, before the major rise up, the present dip should not see it move below 2550.

Note BP has moved out trading range and is a play for momentum traders looking to push it higher for a few days more. Hilton Group, oversold on a momentum indicator, starting to look like a trend play in the short-term if it breaks 265p - recent high.

J Sinsbury too. What seems clear to me at this early stage is that the first half of August at least could be a good trending month.

Value-Growth

One of the stocks on my proprietary 'value-growth' templates is BSS Group. It catches my eye because of the strength of the trend. I expect it not to break the upward trend, even though it is a value and growth based idea based on earnings, revenue to price and year on year growth comparisons, rather than a momentum play.

(For ADVFN bookstore users there is a special offer: a free CDROM going over some key trades from the previous month - these CDROMs are free each month to purchasers of the 15 multimedia audio-visual CDROMs on 'How To Invest Better' from the ADVFN bookstore under 'Alpesh' in the search engine. For everyone buying the full 15 set - just drop me a separate email and the publishers will arrange for signed copies of two of my latest books plus the free CDROMs every 4 weeks, for 12 months.)

Crazy Small Stock

On this we have British Energy, Flying Brands.

All pure adrenalin momentum plays - not recommendations but simply 'crazy small stocks which may continue steep rises (or turn and burn) - but they almost certainly won't stand still.