Thursday, July 22, 2010

How To Find Stocks To Buy Using The IBD Stocks On The Move Screen

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I'm a little late posting today because I've been trying to put together a post I can be proud of that might also be of interest to my readers and I came up with this: How to find stocks to buy using the IBD Stocks on the Move screen. This screen appears every day in the Investor's Business Daily and also is prominently displayed on the front of investors.com. I've discussed the Stockbees IBD 200 Strategy that I found a while back and was struck by it's simplicity -- as were his readers and got to thinking that you could probably take any screen in the IBD and trade it. I'll be the first to admit, I am not a trader but I am trying to make my mark as far as creating my own type of implementation of the CANSLIM strategy and to improve upon my post called the Ultimate Buying Stocks Guide.

While the great thing about learning how to buy stocks is the choice we have in investment vehicles, this is also the very thing that makes investing quite a challenge. It's very hard to focus on one thing and perfect it. If more of us spent time mastering one specific idea we'd all be better for it. For most of us though, it's easier to float from idea to idea. I've always said that rather than a bunch of new ideas, we need ideas that we apply and put into action.

So, the goal of my specific strategy here is to number one, keep things simple by using one stock screen and number two trade it successfully. So, let's begin investing today with this technique.

If you are not familiar with the IBD Stocks on the Move screen, you'll find it on page B1 of the paper each day and a slightly different version on the front of investors.com. The fact that this screen appears on the front of the making money section and on the front of their website should tell you one very important lesson -- that IBD thinks this screen is important. I figure if it deserves such a prominent location it should be one of the best screens we can use.

The idea behind the Stocks on the Move is to pick up institutional buying. Usually the best stocks to buy right now are the ones that they are buying because the increase in demand for the stock due to their buying causes the stock's price to rise. You want to hop on board for the ride. Institutional support is key for this to happen. Any time they start pumping money in a stock, it will show on a stock chart in the form of a price increase on higher volume. Stocks with surges of volume and a price increase will show up here. It will be virtually impossible for a winning stock not to show up here. This is an important point.

Now that we know what the screen does, the next step is to try and find the best stocks to buy in it and which shares to buy today. The first criteria I set for myself is to take the stocks that are in bold. These stocks are stocks that are in the 80 EPS and 80 RS category. Most likely, the SmartSelect rating will also be over 80 as well.

Part of using this screen is that it brings to the surface stocks you want to look at. You can set your minimum thresholds however you want. What I decided to do was this.


  • Only review the stocks in bold with 80 EPS and 80 RS

  • Only choose stocks with average daily volume of over 300,000 shares

  • Only choose stocks over $15 for NASDAQ and $20 for NYSE

  • I then am left with a good list to work with which I plug into the My Stocks List on investors.com

  • I then sort based on the SmartSelect data and only keep stocks that are

  • Composite over 80

  • SMR Rating over A or B

  • Acc/Dist A or B

  • Group Relative Strength A or B

  • Then I check the fundamentals to make sure that

  • EPS % Change in the latest quarter is over 25%

  • That EPS % change from the prior quarter is increasing

  • That sales % change in the last quarter is over 25%

This leaves me with a list of good stocks to buy. But it doesn't mean I should buy them. Today I found the following stocks which were whittled down from 24 initially.

The ticker symbols were:

MRX VMW RVBD VLTR NETL

Once I have these, they may potentially make my watch list if the remaining qualifications I will set are met which I'll discuss later. All of these things you should start incorporating in your daily stock market investing routine.

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Stock Market Investing Today - Smart Investing.

1 comments so far

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