Tuesday, July 20, 2010

Best Share To Buy Now

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My friend called me today and as usual we talked stocks. One of the things we talked about was if you could only buy one stock, what would be the best share to buy now. I decided that if I only had one choice of shares, the best one to buy today would be Google (GOOG). He decided on Apple (AAPL). For now, both shares seem to be good options as far as choices go.

At any one time though, stocks fall in and out of favor. What's a good share to buy at this time, won't be next year and the cycle repeats. That's why you've got to keep a constant watch for stocks that might be the new leaders in the future. A way to do this is by watching breakouts. I prefer to add stocks to my watch lists only after they have broken out. I typically look for breakouts of a 2% price increase on volume over 100% increase from the prior day.

The way I look at it, only stocks with institutional support deserve a look at. This support shows itself in strong increases in volume and price. The law of supply and demand dictates that when more shares of a stock are in demand, the price has to go up. When the demand for shares goes down, the price must fall.

When institutional support leaves a stock, the price falls because there is no demand for it any more. This is why you must exit a stock when it does. The big money may never return and because of that, you may never have the same fuel to drive up the stock's price again.

Since today's top stock might be the share of the day to buy, you've got to constantly keep on top of it for signs of distribution, or selling. When you see it, it's time to get out. That's my stock market investing tip of the day and I hope it helps you figure out which shares to buy today.

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