Every Thursday, the Investor's Business Daily provides it's IBD 200 stock screen. This is a list of the top 200 stocks in the market as ranked by their proprietary Smart Select Composite Rating. Each week, you'll find all stocks ranked 96 or higher. This is a nice stock screen to focus on when you first start trading because it will give you more than enough investment ideas to look at each week.
To me, the first major hurdle you have to get over as an investor, is how to narrow down the stocks you want to focus on. Potentially, there are thousands of stocks you could choose to invest in on a daily basis. Your job is to weed out the ones you wouldn't want to invest in first. The IBD 200 stock screen is a good place to start.
How To Use The IBD 200
What follows is how I use the IBD 200 to find potential stocks to invest in. The first thing to remember about the list is that just because a stock appears here, or on any screen for that matter, doesn't mean that it will automatically go up. It's just computer generated list. On every list, you'll find some winners and some losers. Second, just because a stock has the number one slot doesn't mean that it is the best stock. It just means it has the highest rating based on how the IBD calculates everything.
I personally use the eTables service. I do this because you can download the top 300 stocks ranked by composite rating daily. I will download the stocks to an excel spreadsheet. Once in the spreadsheet, I only look at the top 200. Sometimes there are a few more than 200 ranked 96 or better.
Once I've got my data, I copy the first 50 stock ticker symbols and put them in a watch list on investors.com using the My Stock List feature. I only copy 50 because that's all you can put in the list. I then sort the list by price percentage change. What I am looking for here are stocks that increased in price by 2% or more. The list is sortable by category, so all you need to do is click the column header. I then delete all those that didn't make the cut. After I have done that, I then look for stocks with a 100% increase in volume.
Next, I write those symbols down or paste them into a text document. I then do the same thing with the next 50 until I've looked at all 200.
This leaves you with a short list of stocks you can then focus on by using the Stock Checkup feature to dig deeper into each stocks fundamentals and ratings, like EPS and RS.
The great thing about this is it keeps things simple. Give it try to narrow down your search for stocks.
EmoticonEmoticon