Stocks To Invest In Right Now

Readers that visit my site consistently ask me what are the best stocks to invest in right now. First of all, I tell them that you don't want to choose stocks off of some list of hot stocks nor do you want to fall for these penny stock scams where the stocks are being manipulated. What you do want to look for are stocks that are breaking out on higher volume and if they are hitting new price highs even better.

The first thing I did to screen for stocks was to establish what a price break out meant to me. In my case, I defined it as a 2% increase in price combined with a 100% increase in volume. Each day once the market closes, I use the screens on investors.com to find stocks that met that criteria before I look to analyze them any further. Therefore on a daily basis, you eliminate a lot of stocks you need to look at each day.

That being said, just because a stock meets that price and volume criteria, doesn't mean that it's the best time to buy it. What you need to do is also establish a proper buy point. O'Neil calls this a pivot point. Once the price exceeds the pivot point by .10 when it breaks out, this is the CANSLIM strategy in action.

However, if it's extended in price more than 5% above it's pivot point, it's not recommended that you buy it. The reason is that if you use an 8% stop, the stock will probably retrace down and stop you out.  This will eat away your capital and you want to avoid that at all times.

So start by finding stocks that are breaking out on price and volume similar to the stock that we are watching right now OPEN. OPEN appeared on our screen and broke out on price and volume that met the above rules.

Even stocks that breakout can break down. Always follow your sell rules. Establish a stock market investing routine that helps you identify pivot points.

Good luck!