Middle East Turmoil

Eyes are on countries such as Egypt and Libya to name just two. Stock investors are rightly concerned about the events they see unfolding. Concern over fuel prices are extreme as people see the price of a barrel of oil continue to rise. As I have stressed many times markets bottom when news is bad and we must be ready to pounce if buying on volume resumes.

As the graph below shows courtesy of www.bigcharts.com we had a high volume sell off which is certainly not good news. However note that major indexes are still above the all important 50 day moving average.

The investor at this point should watch carefully for the indexes to hold above that moving average and continue to maintain a list of stocks that are consolidating during this market down turn. Stocks that can consolidate will be the first to rise if the stock market strengthens. Try and maintain a list of stocks that have moved up and are now moving sideways rather than breaking down. If the down trend continues do not buy but continue to add to this list as you find more stocks holding up. Remove from your list the stocks that break down.

Indexes March Onward – ADS AVT CMG DECK

For most of this year the gains have been slow and grudging however the indexes continue to march forward and stay above their 50 moving average. As I have been previously mentioned we have no choice but to follow the indexes as long as they continue to move up.

Personal opinion suggested the markets were risky however my recent stock picks have all moved up, some significantly. It just goes to that personal opinion should never influence your stock purchasing strategy. Always look at price and volume and ignore the news and forecasts. As long as the indexes stay above their respective 50 day moving averages then you need to be on the lookout for new positions as well as topping up on the positions you already have. My readers were taken out of positions as we had the aggressive sell off of some of the leaders at the start of January. Many of these reasserted themselves and started moving up again. The correct decision in some of these situations was to sell out as they fell on high volume. We can never know where the sell off will end. Such stocks can always be repurchased as they form new bases and then break out again to new highs on volume. Remember capital preservation must always be priority number one.

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. You can also catch me on Twitter for more regular updates and YouTube for some educational videos. See links at upper left.

ADS – $78.96

AVT – $36.97

CMG - $260.15

DECK - $90.03