A rising market is an opportunity to accumulate lots of companies at very low risk. As long as the companies you buy keep moving up (and provide a profit cushion) you can add more and more companies. As each company moves up and allows you to lock in that break even sell stop then you can keep buying other opportunities as well as adding to companies you already own. It is very important to diversify and buy lots of companies. We cannot know which will be the real winners so if you buy a number of companies on the way up you will surely hit one or two real winners.
The real winners will stand firm when the market pulls back allowing you to stay with those companies. When the market starts moving up again you are still in those stronger companies and can continue adding to them. Of course the hope is that your strong companies become long term investments, we can only hope. When doubt creeps in as these companies pull back a little be sure to start selling off portions to lock a profit. If they stabilize and move back up again you can resume buying.
Here are a few companies that have recently broke out on high volume. Add them to your watch list and study the reaction to the recent jump up. If they fall back on high volume then remove them from your watch list. If they stabilize in a quiet zone with very little selling then it’s time to buy using sell stops of 10% on just an initial small purchase of that company. Remember don’t buy if earnings are imminent.
AIPC - $39.09
BGS - $10.35
CATM - $12.53
PCLN - $257.00
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