Qullamaggie Stream Notes: 15 December 2023
Classic bull market action — and speculation money is back!
A shorter stream (lasting 27:24), with some really nice moments. While I felt (and this is my personal opinion) that the previous stream had more nuggets of timeless wisdom, this stream had some really insightful discussions of specific stocks Kristjan’s recently traded. I’ve included timestamps to those moments in my notes below.
Today’s notes cover:
Kristjan’s positions and the day’s notable movers;
Recent interesting trades by Kristjan, and about selling into strength;
The “classical bull market” environment of late;
Kristjan’s insights into China names;
Kristjan’s self-declared biggest weakness — overtrading; and
A closer look at the best EP of this earnings season.
Kristjan’s positions
ALT (new; part of the GLP-1 theme; Kristjan discussed his entry from 11:19 in a lot of detail — it’s well worth rewatching that part for yourself)
BITX
DDOG
DKNG
GME (new; entry discussed from 15:16)
GTLB (new)
LMND (new)
PDD
PINS
SMCI (new)
SYM
VKTX (new; part of the GLP-1 theme)
Sold since previous stream (from 1 December): $PATH and $PLTR.
No new positions during this stream.
Recent trades: $VVOS and $CCCC
Kristjan mentioned that he’d traded $VVOS and $CCCC between the two streams.
Kristjan discussed both stocks further from 18:09, in terms of his entry, but also as examples where you have to sell into strength. You might see that as contradicting what he said in the previous stream, but I see it more as adding nuance:
You can sell in partials.
It’s about understanding the reason behind needing to use a faster moving average than the 10- and 20-day MAs for something like this. I explained this in more detail on X/Twitter a couple of weeks ago.
His words that “it depends on the stock” (19:26) sum this up well. Trading is a lot more art than science, particularly if you’re looking for superperformance. Different situations must be handled differently, and I personally also feel that instinct and intuition — which are both closely linked to experience, of course — also play a big role in trading.
The day’s notable movers
(Kristjan always adds the day’s notable movers to a watchlist called ‘zz [date]’, which he then tracks for about a month.)
GETR
VRCA
Kristjan removed both names a minute after the market opened (6:36).
Market environment
Lately, we’ve had classic bull market action. When you get a market like this, with the 10-day MA above the 20-day MA, and with both MAs rising, “that’s where the money’s made” (3:00).
You can use other MAs too. Kristjan says he “maybe” uses the 50-day MA. If that MA is also rising, that’s definitely a nice bonus.
A big reason for Kristjan to call this “classical bull market action” is that we’re (finally) seeing money pouring into small caps — see, for example, the $IWM (chart above).
Later in the stream, Kristjan mentioned how it’s interesting to see that, over the past two years, people have been conditioned to treat every rally as something to sell into, especially where small caps are concerned.
But the $IWM just broke out of a two-year trendline. And the volume on this recent rally has been really high — we’ve not seen volume like that, on individual green days, since 2020.
As Kristjan says (9:57):
“That’s always what you want to see[:] long-term breaks on big, big volume.”
But that doesn’t mean that we’re going to go straight up. Kristjan feels we really need to test the 10- and 20-day MAs, either through time or through price action, but he hopes for a good start to 2024.
First, however, we need some rest, especially in the stocks that have made some really good moves lately. And specifically on the day of the stream, Kristjan wasn’t seeing much to do, whether on the long or on the short side. It was just a day for managing open positions.
Illustrating the classic bull market point with $ADCT (7:09)
Someone brought up $ADCT in the stream chat. This had a nice breakout from a (low) flag on 13 December 2023:
As Kristjan says: “This is what happens in bull markets”. You can’t trade breakouts or EPs in a downtrending market, but once you get an uptrending market, you’re looking at, as Kristjan puts it, “free money”.
China names
Kristjan said that China names have been a “big, big laggard” in this rally (7:36):
However, once $KWEB, etc. can break out of their big ranges, “there’s going to be big moves”. We’ve already seen some nice moves in individual China names, especially in education, like $GOTU, $TAL and $EDU. Plus, there’s $PDD in Kristjan’s portfolio:
Kristjan’s biggest weakness: overtrading
Every week, month and year, Kristjan feels that he overtrades (16:33). He calls this his probable “biggest weakness” — something he also brought up in his Chat With Traders interview from February 2021.
While Kristjan doesn’t suffer big losses due to cutting losers quickly, sometimes he “just can’t help [him]self”. As he says from 16:52:
“My problem is [that] I tend to trade. Sometimes, I just can’t help myself, even [though] I know that I shouldn’t trade. I’m like, ‘you know what, I’ll just try this out; I’ll take half size’. But, you know, [if] you do a half size in a market that’s bad, and you do it ten times, it kind of adds up!
“That’s always been my problem. I’ve gotten better, but it’s still one of my biggest weaknesses. That’s usually my biggest detractor every year: overtrading.”
$DRCT (20:27) — best EP of this earnings season
This stock also came up during the previous stream.
Basically, if you want to get a sense of what a picture-perfect EP looks like, rewatch the stream from 20:27. I really feel that this one is best heard from Kristjan directly, but just to recap his key points:
Triple-digit EPS revenue growth.
Big revenue guidance raise (to $170–$190 million, when the consensus was $128.08 million).
Huge volume.
The stock broke out of a big base.
To quote Kristjan: “This is by far the best EP of this earnings season. This is called ‘small account edge’.”
Another really insightful moment of the stream (in terms of EPs) was when Kristjan discussed $CCCC again, and why he traded it, from 25:27.
More resources like this
All my Qullamaggie notes are available here. For just stream notes, use this link.
The Trading Resource Hub’s full archive is available here.
More about Qullamaggie
To learn more about Kristjan Kullamägi, aka Qullamaggie, and the way he trades, visit qullamaggie.com.
All past streams are available on Kristjan’s YouTube channel.
Thank you!!