The stock market continues to perform well as accumulation days start piling up. Traditionally the run up to mid term elections are bullish but as I said many times before do not try and be smart by finding reasons, just buy the trend. I could just as easily counter the bullishness by saying September and October are traditionally bad months but it means nothing. I say again just follow the trend and pay attention to price and volume.
After some consolidation on lower volume the Dow Jones Index again broke out on higher volume. This could end tomorrow, next week or next year. Don’t be smart and try to forecast just continue to buy the breakouts by adding to existing positions and adding new positions. The important thing to remember at this juncture is that you can run the risk of buying too many stocks and not waiting until you can move up your sell stops to break even before buying more. This can be dangerous because if the market suddenly turns down then each of those new companies could produce a loss, risk control is still very important.
Remember from all the stocks you buy (and by now you should have many winners) all it takes is ONE great company to make a lot of money even if all your other choices fail. I say this because that one winner you will be adding to in increasing size as it climbs and all those other potential losers you will be stopped out after the initial purchase.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks. Rather the idea is to teach stock selection with low risk advice.
RES - $19.94
ANDE – $40.09
JOSB – $42.58
HLF – 59.77
Saturday, September 25, 2010
Saturday, September 18, 2010
Buy the Breakouts – NFLX, AAPL, PAAS, ACOM
We have another good week in spite of bad news everywhere. Continue to ignore the news and watch the trend since the stock market reflects not what is happening today but what will happen in the future. Some sideways action on low volume would not go amiss at this point to allow the stock market to consolidate recent gains. In fact a small pull back on low volume would be fine. Of course a pull back on volume could spell the end.
In the past I have likened the money management strategy I use to planting seeds in a garden and watching them grow into big trees. To have a good forest you need to plant lots of seeds. Every new company purchase is the planting of a seed and adding to existing positions is fertilizing those seeds and watching them grow. Remember the intention is to keep adding to seeds that grow (the stocks that rise) and allow the bad seeds to die away (let non performing stocks be stopped out). This strategy allows you to pour your money into the performing stocks. Of course you have to keep planting those seeds (buying new companies) to find the winners. Remember any new purchases you need to control your risk by waiting for them to rise and raising your stops to breakeven before you make new purchases.
Like you I continue to add as the stock market continues to climb. We cannot know where the top is but must continue to invest into the uptrend. If the market reverses on volume then we will get safely stopped out of our purchases with little or no loss.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks rather the idea is to teach stock selection with low risk advice.
NFLX - $140.50
AAPL - $274.90
PAAS - $28.41
ACOM - $21.00
In the past I have likened the money management strategy I use to planting seeds in a garden and watching them grow into big trees. To have a good forest you need to plant lots of seeds. Every new company purchase is the planting of a seed and adding to existing positions is fertilizing those seeds and watching them grow. Remember the intention is to keep adding to seeds that grow (the stocks that rise) and allow the bad seeds to die away (let non performing stocks be stopped out). This strategy allows you to pour your money into the performing stocks. Of course you have to keep planting those seeds (buying new companies) to find the winners. Remember any new purchases you need to control your risk by waiting for them to rise and raising your stops to breakeven before you make new purchases.
Like you I continue to add as the stock market continues to climb. We cannot know where the top is but must continue to invest into the uptrend. If the market reverses on volume then we will get safely stopped out of our purchases with little or no loss.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks rather the idea is to teach stock selection with low risk advice.
NFLX - $140.50
AAPL - $274.90
PAAS - $28.41
ACOM - $21.00
Saturday, September 11, 2010
Improvement Continues – GMCR, GEOY, AKAM, CMG
The stock market continues to show strength in the face of dismal economic news. As an investor we have to follow the stock market indices and follow the trends. The stock market is a forward looking indicator by as much as 6 months. The action we see today reflects what the economy may be doing 6 months from now. Today it is clear why the stock market topped out some months back since we see a struggling economy today with mediocre GDP numbers and high unemployment still. Those earlier gains up to May probably occurred as people and the stock market saw us leaving the risk of deep recession or even depression behind. Normally we get a strong recovery from such deep slow downs but this time we are seeing a very slow recovery most likely due to the high budget deficits our government are creating. Of course as I always say we can speculate all day long but the bottom line is to follow the stock market indices.
The graph below courtesy of http://www.bigcharts.com/ indicate the Dow Jones Index came off a bottom 8 days ago and as mentioned in my previous blog we even had a follow through day. Note the higher volume accumulation days since that time. The down days with red bars are on lower volume, this is good news, let’s hope it holds. The stock market indexes are now entering an important area of resistance as indicated by the solid horizontal line, this will be a test for markets.
Mid June and early August both sold off at these levels. People who bought stock at these levels got their fingers burnt and will now start selling as stocks get back to the prices they paid. The question we need answered is that will the market be strong enough to absorb those sales or will the market tank as a result. The best solution would be for the stock market to trade sideways for a while at these levels and digest the recent gains as we absorb the expected stock sales that will occur. From that sideways action it would be great to see the market move higher on increased volume. Of course what we want means nothing and the stock market will do its own bidding. All we can do is continue adding to our positions as they climb and open up new positions if this uptrend continues. In the meantime remember to protect your initial purchases to lock in break even points or gains that you may have.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks rather the idea is to teach stock selection with low risk advice.
GMCR - $34.36
GEOY – $37.96
AKAM – $49.80
CMG - $165.60
The graph below courtesy of http://www.bigcharts.com/ indicate the Dow Jones Index came off a bottom 8 days ago and as mentioned in my previous blog we even had a follow through day. Note the higher volume accumulation days since that time. The down days with red bars are on lower volume, this is good news, let’s hope it holds. The stock market indexes are now entering an important area of resistance as indicated by the solid horizontal line, this will be a test for markets.
Mid June and early August both sold off at these levels. People who bought stock at these levels got their fingers burnt and will now start selling as stocks get back to the prices they paid. The question we need answered is that will the market be strong enough to absorb those sales or will the market tank as a result. The best solution would be for the stock market to trade sideways for a while at these levels and digest the recent gains as we absorb the expected stock sales that will occur. From that sideways action it would be great to see the market move higher on increased volume. Of course what we want means nothing and the stock market will do its own bidding. All we can do is continue adding to our positions as they climb and open up new positions if this uptrend continues. In the meantime remember to protect your initial purchases to lock in break even points or gains that you may have.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks rather the idea is to teach stock selection with low risk advice.
GMCR - $34.36
GEOY – $37.96
AKAM – $49.80
CMG - $165.60
Friday, September 3, 2010
Follow Through Day – DAG, FFIV, INFA, AZO
Wednesday just gone was a “follow through day” on the Nasdaq index. The index was well up with volume higher than the previous day. Follow through days are expected on the 4th to 12th day from a low and Wednesday was the 6th day.
Remember what a follow through day is. It is simply a point in time that says “odds favor” a rise in the market and “may” be a good time to buy. Follow through days can fail but they usually indicate a gain of unknown price and duration. Not much help you might think but remember ALL bull markets begin with a follow through day but not all follow through days lead to a bull market. As I have said before the stock market is an art not a science. All we can hope to do is find “odds favor” conditions such as now.
Remember start buying small and wait to see if your picks are successful. If they are successful then add to them and buy more stocks, don’t forget your sell stops, money management is key. Here are some interesting looking stocks that may be ready to make a move. Don’t forget to make sure that earnings are not imminent on your picks. Remember this blog site is not a newsletter that promotes stock tips or penny stocks rather the idea is to teach stock selection with low risk advice.
DAG - $9.12
FFIV - $93.86
INFA - $34.64
AZO - $217.68
Remember what a follow through day is. It is simply a point in time that says “odds favor” a rise in the market and “may” be a good time to buy. Follow through days can fail but they usually indicate a gain of unknown price and duration. Not much help you might think but remember ALL bull markets begin with a follow through day but not all follow through days lead to a bull market. As I have said before the stock market is an art not a science. All we can hope to do is find “odds favor” conditions such as now.
Remember start buying small and wait to see if your picks are successful. If they are successful then add to them and buy more stocks, don’t forget your sell stops, money management is key. Here are some interesting looking stocks that may be ready to make a move. Don’t forget to make sure that earnings are not imminent on your picks. Remember this blog site is not a newsletter that promotes stock tips or penny stocks rather the idea is to teach stock selection with low risk advice.
DAG - $9.12
FFIV - $93.86
INFA - $34.64
AZO - $217.68
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