Once Again, I Needed Patience

In the December 19th, 2014 Seasonal Forecaster newsletter I focused on a stock that wasn't on many active traders' radar screen. CBRE Group (CBG) is a commercial real estate firm (their previous name was CB Richard Ellis Group). I stated:

“What makes them interesting is there's a big push now for medical institutions to sell off their real estate and lease it back (a major shareholder is pushing McDonalds to do the same thing). CBRE Group is one of the major players in the medical field: CBRE Group, Inc. Healthcare Practice Achieves Strong Growth In 2014

“CBG has been climbing upwards since mid-2011. Positive news stories about the company pushed the stock above resistance from earlier 2014 highs. The next target is the 2007 highs in the low 40's.”

I pointed out CBRE Group's strong fundamentals and then went on to the seasonal track record:

“As far as the seasonal track record, CBG has gained an average 4.6% over the next 3 weeks, with gains in 9 out of 10 years. CBG has gained an average 28.0% over the next 20 weeks, with gains in 10 out of 10 years.”

I then covered the trade setup and recorded a trade entry at the open of 34.59.

The overall market sort of churned in January. CBG retreated from its breakout, and while by mid-February it had returned to the December highs, it wasn't showing the strength required to take it beyond the previous highs. I considered closing the position and moving on.

But experience prevailed. I came to my senses and reminded myself that nothing had changed. The fundamentals were still strong. No news had come out about the company.  The strong seasonal pattern suggested institutions have previously accumulated this stock this time of year.

I've seen this many times before. What was likely going on was a battle between buyers and sellers. Whenever some CBG was offered for sale, there was probably an institutional buyer picking it up. This was merely a process of weeding out the remaining sellers.

So I decided to be patient. It took one more month for institutions to weed out all remaining sellers at the 35 level. On Wednesday, CBG jumped 2.5%. While it is up only 3.3% from my December trade entry, it should have plenty more upside if the overall market holds up.

This stock had multiple signs of institutional accumulation: an obvious volume pattern where volume on up-close days was overwhelming volume on down-close days, an Up/Down Volume Ratio above 1.3, and an ascending On Balance Volume indicator that was setting new highs.

Once again I'm reminded that patience is often one of the biggest factors in successful trades.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2015 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

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