Saturday, October 23, 2010

Why Is The Stock Market So Good Today?

A friend of mine asked me why is the stock market so good today? He’s been reading about the market trending higher. He was one of my friends who lost so much money in the last bear market. I think many people thought there would be no turn around. But everything runs in cycles and the stock market today is much higher than it was a couple of years ago.

Even though the stock market today is higher, you still have to pay attention to the overall market trend as it can change anytime. You do this by reading the IBD every day, checking out the day’s action on the charts, watching the IBD TV market wrap and reading the Big Picture column. The Market Pulse has a current outlook available each day. You want to pay attention to this on a daily basis and only invest when the market is a confirmed uptrend. If you do that, you’ll see your results improved.

The stock market today might be moving with the dollar.

Aside from that, I think there are a few reasons that the stock market is probably doing better. The first is that companies earnings have improved. This translates into higher stock prices. The second reason is low interest rates. Low interest rates are good for the stock market today. You can see that when interest rates rise, like they did in China this week, the market reacts by falling. Once the Federal Reserve Bank starts raising rates at some point, you’ll see the market fall. The final reason that I think the market today has been going higher is because dollar has been falling. I think that when the dollar falls it pushes the stock market higher in the short run. I think this because the inherent value must level out. The value of the stock is the same even if the dollar is worth less. You can see on the chart that the dollar strengthened recently and the market didn’t do as well as it has been.

But the usual reason that the stock market rises is because the “big money” or institutional money has been buying stocks. When this happens, the increased demand forces prices higher. You can see this in the form of higher closes on higher volume. Watch the charts of the major indexes daily and watch for this tell tell sign of why the market might be doing better today.

Anyway, that’s my perspective. Good luck on your stock market investing program.

Tuesday, October 19, 2010

Buy And Sell Stocks: How To Lock In Gains

You've got to learn how to buy and sell stocks in order to make money in the stock market. You can't expect to buy individual stocks, hold them forever and make money. Eventually your stock will come down in price. This is because the stock eventually falls out of favor with the institutions that pump money into stocks which in turn drives up their prices. I wanted to show you an example of this specifically with a stock that I bought awhile back and sold today. This articles is part of a larger series that I am putting together called Buying Stocks - A Case Study. You can find the last four posts by visiting these links.

Stocks To Buy
Good Stocks To Buy
How To Buy Stock
Hot Stocks To Buy

You've got to buy and sell the stocks you find to take paper gains and turn them into real ones.

On September 20, I bought 30 shares of MSB for $33.33.  Now if I was a buy and hold investor, I would ride this stock through thick and thin because that's what Wall Street has taught the vast majority of us to do. As I've said before, I think they do that because they know that most of their brokers have no clue when you should sell and their also probably too swamped to give you that kind of personal attention anyway. Going back to my rule that you should do what Wall Street does and not what they say, you'll learn that mutual fund managers don't buy and hold forever, they figure out when to buy and sell stocks in their funds. If you are buying individual stocks, then that's what you have to learn as well.

Learning how to buy and sell stocks is an acquired skill that combines your experience with some luck as well.

Today when the market opened, I sold all 30 shares of MSB for $40.75. At the end of the day, the stock had dropped to $37.09 for a 10.02 percent drop in the share price. I on the other hand locked in a 20.06 gain because I sold the stock when the stock's chart told me that something was wrong. This was part luck and part analysis. But this is the kind of thing you will find out when you start investing. You will luck into some things and you will learn your way into things. A while back I had picked up another stock that rose 25 percent and I didn't pay attention and it dropped like a rock. When MSB went up 25 percent from my purchase price, I thought it might do the same thing. It didn't do it right away, but I started watching it for signs of selling.

Learning when to buy and sell stocks properly will make you a lot of money.

If you look at the daily chart to the right, you can see that the stock had a pretty nice run even before I got into it. At point number one on the chart notice that the stock closed lower on higher volume (point 2). I was concerned then because this is a sign of selling. I noticed though that it closed at the upper range of the high for the day, so held onto it. A few days later, I noticed that it closed lower on higher volume again. At point 3, it closed at the low end of the high low bar on the chart on higher volume (point 4). This combined with the weakness in the performance of my watch list worried me so I put in a sell order this morning so I could lock in my 20 percent plus gain instead of seeing it disappear completely.

You can see by looking at the volume that it spiked when the price closed lower. This is your signal that institutions are getting out. You should pay attention to them. Once they leave, the price could fall futher leaving you holding the bag.

Keep learning about investing in the stock market and keep me posted.

Sunday, October 17, 2010

How To Build Your Stock Watch List

I've updated my stock watch list for this week. You can usually find the list of stocks I'm watching in the sidebar. I currently have 19 stocks on my watch list. I keep these in My Stocks Lists at and also keep them in my Google Finance account. I thought it would be a good idea to talk about how to set up and manage your stock watch list as well.

The first step in building a watch list is screening for stocks. Having already set up a specific way that I screen for stocks through the Stocks on the Move column in the IBD so I've got that covered. Once I take the stocks I find for the day that pass my additional screens for volume, SmartSelect ratings, earnings and sales and for float, I then add these new stocks to my watch list.

The next thing I do after that is then take the stocks already on my watch list and make sure that they still meet the same criteria to make the list in the first place. For example, if the Acc/Dis rating drops below a B- I then delete it off my list. I decided to do this because I needed a way to manage the list in such a way that it pruned itself. This seemed as good as any. This recently happened to the stock ARUN. I also had a position in this stock and decided to sell it as well.

Once you have this list, what do you do with it? I usually sort the list by price percentage change and start looking at them for proper buy points. If you have read How to Make Money in Stocks, you know that ratings are not enough, you've got to start looking for a proper setup. I do this by reviewing the chart for each stock on my list and looking for chart patterns like the cup with handle, the double bottom or a flat base. I'm also looking for stocks that have been under steady accumulation.

I think that it's worth noting here that when I do this review that I look at the weekly chart. By default, most charts on retrieve the daily chart. Once I feel I've identified the pattern, I flip to the daily chart to look closer at the volume on breakouts and to identify a pivot point. This pivot point is .10 cents higher than say the high point in the handle in the cup with handle pattern. For each pattern, you'll have to learn how to spot this.

This is by far the hardest part of the CANSLIM strategy. Do it right and you'll avoid getting into stocks that haven't set up properly and also you'll avoid getting stopped out because you bought the stock when it was overextended. You want to buy within 5% of a the pivot point. The way you get good at to start practicing it every day. You may not be right in your analysis but that will come with time.

Here's a good tip. Start looking at the charts of the stocks on your watch list. Then review the IBD's columns called the IBD 100 and the Weekly Review. Every week the stocks in the screens have mini charts that have a little note at the bottom that clues you into what is happening. Sometimes they say exactly the buy point that they calculated. Review what they say and get a bigger chart out and start taking a look at it for comparison. Do this every week and you'll improve. You'll also learn by making simulated buys of the stocks to see if they fall below the pivot points. Reviewing these practice trades will also provide you with an additional way to learn. In fact, I recommend that you constantly buy stocks in your simulator even if you are in a few stocks. This will enable you to see approximately where you would have bought it when you liked the stock in the first place.

The first step in utilizing your stock watch list is reviewing the charts for all of the stocks on the list. You do this so you can spot chart patterns and identify proper buy points.

Let's take a stock this week and have a look. Gulf Port Energy Corp (NASDAQ:GPOR) appeared on my screen Friday. It closed at $16.37 on volume 495.29 percent higher volume. You can see the chart at the right.

I believe that in looking at the chart that this could represent a double bottom base with the high point in the middle of the "W" is where you want to add your .10. This would give me a buy point of $14.81. Is my analysis correct? Honestly, for me I am not sure because only time will tell. This is the whole point. Don't worry about being right or wrong, just make a determination. With experience you'll improve your eye in looking at charts.

Now that I know my proper buy point, I want to make sure that volume surged as it crossed it. If it did, then I check the stock's current price. It closed for the day at $16.37. I want to make sure that if I put an order in for the stock that it's within 5% of it's pivot point. I then take $14.81 times 1.05. The result is $15.55. Since the current price is over that, then this stock is over extended from the buy point that I determined. Therefore, I wouldn't want to buy this stock unless it retreats in lower volume below that point. At that point I might reconsider.

While I typically do this with only the stocks up in price for the day on higher volume, it would be a good habit to do it with all of them to get a feel for how stocks form bases and what breakouts look like. A couple of other quick points before I wrap up today's post. One thing I like to do is see how many stocks were up for the day on my stock watch list. This gives me an indication of how well the stocks I'm watching are performing compared to the market. What I look for is a lot of up stocks when the market has a good day. If this is the case, I feel that I am looking at the right stocks.

The other thing I suggest is printing out the charts for stocks. Then you can make notes on the stocks, draw trend lines and review them later.

Good luck investing in the stock market. Let me know if you have any questions. For further review, you might want to check out my series called Buying Stocks - A Case Study.

Thursday, October 14, 2010

Hot Stocks To Buy

I'm back in search of hot stocks to buy. The market indexes were all lower today but since volume was lower it didn't affect the current market outlook which is market in confirmed uptrend. Remember that the first thing you want to check each day is the market direction. You can find it every day in the Big Picture column. I always check the charts for each index daily at So while the market didn't go up today, it didn't reflect any distribution. This has been a prolonged uptrend which is good for us as we want it to go for awhile so we can get our practice out of the way before we use real cash. So far, I've picked up 13 positions (including today's pick which I will buy tomorrow.) Two I've closed as they were stopped out. I'll review my positions in another post.

I've been still working on my Buying Stocks - A Case Study series. Here are four additional links to the previous posts in the series for your reference.

Best Stocks To Buy
Stocks To Buy
Good Stocks To Buy
How To Buy Stock

Finding hot stocks to buy today means more than fundamentals. It means finding stocks with proper setups.

For now, though, I turn my focus on finding hot stocks to buy today. I decided to add STR Holdings, Inc (NYSE:STRI). STRI was up 3.87 percent on volume that was 79.41 percent higher than average. From my calculations, the stock broke through a buy point of $24.60. It closed higher today at $25.47. It's extended about 3.5% above the pivot point which puts it within the 5% range you'd like to see. Otherwise the stock is to far extended from the buy point.

I'm going to set a price target 20 percent above my purchase point which I will know tomorrow once my market order gets executed. Also, I'll calculate my stop limit of 8%. I've been making all of my transactions after the market closes each day. I am doing this because I work during the day and it's hard to keep on top of all the hot stocks to buy now. I spend the after hours focusing on my screens and reviewing my stock charts. I'm starting to get a real feel for what I want to look at each day.

An additional tip that I would provide is to take a look at the stock charts in the IBD Weekly Review which comes out on Fridays. Each stock chart talks about the specific buy points the editors think apply to certain stocks. This is a nice feature of the paper and if you take the time to study their notes, you'll start to recognize how they calculate pivot points. In the chart above, it's .10 above the top point of the point in the middle of the "W".

As an additional note, I've added my current watch list to the sidebar for your review. Good luck investing in the stock market.

Tuesday, October 12, 2010

Good Stock Market Buys

Once the market closes, I start looking for good stock market buys. I do this by checking my screens to see which stocks are up in price and up in volume. Those that are and that meet my additional screening criteria are then added to my watch list. I then take a look at the whole watch list and sort it by percentage price increase. This puts the strongest stocks that I find at the top of the list. What I am looking for stocks that are up at least 2 percent on more than 100 percent volume. Depending on the market for the day, I may not add many stocks to my list, I might find stocks that are already included or I might find stocks that didn't have an awesome day.

Today was a day when only added one stock. It was APKT. Let's have a look at a one of the few stocks that might make good stocks to buy today.

Even thought the market finished up today, I didn't see a lot of strength in my list. In looking at it, I found three that I wanted to look at closer today. Here's my analysis of APKT.

Finding good stock market buys starts with a keen eye for proper buy points.

The first stock is Acme Packet (NASDAQ:APKT). While the stock was up $1.00 today or 2.89%, volume was only up 4.07 percent. I've put a chart here to start what I consider the first step in deciding a proper buy point. While technically the stock broke out, it's not a huge breakout. Step one in my chart analysis will be using a weekly chart. It's easier to see patterns on a weekly chart and buy points on a daily chart. What I notice here is that the stock really didn't break out. In fact, it appears to me to be forming a new base. You can see at the top of the chart where I drew the blue line, once it reached the high point and started downward was the beginning of a new base. I would set a buy point of $40.68 on a big breakout depending on what kind of base it forms. Right now I wouldn't purchase the stock. Notice the large increase in volume on down days as well.

So, I'll keep this stock on my list as a potential candidate depending on what kind of base it forms. This is how investing in the stock market works. You've got to take the time to study what's going on. My advice, just get started.

Stockbee Membership: Is It Worth It?

I had a reader ask me today about a Stockbee membership and if it was worth it. I checked the price of his site today and saw that it was $150 for 6 months and $225 for a year. I think that this is an extremely great value. To me that represents a value on par with a subscription to the IBD. One of the things that I think makes his membership such a great value is that he pushes you to make a system and take action. Also, what I really like about him is his belief that you can do it if you set out to master it. You'll find that just by focusing on the market every day and the individual stocks that appear on your screens. You'll learn more by doing and once you start investing, you'll learn by your mistakes.

Having Stockbee to walk you through this process is a great benefit. I think that what concerns people with his membership is that he offers no trial membership. It's easy to think that it might be some sort of scam. I talked more about his site on my Review of Stockbee post a while back.

If you are unsure, take the time to go back and read his blog. He openly talks about his methods right out in the open. Like most crafts that people try and master, you can openly give your stock market investing secrets out a lot of times and never fear that any one will apply them. Charge a membership fee, and this spurs people into action because they want results for the membership fee that they are paying.

In the long run, your money will be better spent with Stockbee than on some Forex system or options system. I almost forgot that he has a ton of testimonials on his site as well.

How To Find Stocks In An Uptrend Quickly

A buddy of mine asked me the other day how to find stocks in uptrends quickly. One of the best ways to do this is to focus on building a watch list every day from your stock market screens you set up. For me personally, what that means is that what I do is look for stocks that appear on the Stocks on the Move screen. If they meet my criteria then what I do is add them to my watch list.

This gives me  a list of stocks that I can check instantly and in a glance I can sort it by price percentage change. Those stocks up in price and also up in volume are stock in uptrends that I should focus on. However, I must do further research and see if it is at a proper buy point. Stocks that have been moving upward for a while may be tiring out and their run might be exhausted if you blindly buy a stock on a day when it appears on the list. This is the value of watching your screens daily. You can see and remember if they have been on their for awhile.

A current watch list will help you learn how to find stocks in an uptrend quickly.

In general though you want to spend your time looking at stocks that are increasing in price and have an RS line that is trending higher. By focusing on these stocks, you increase your chances of finding a stock that has institutional support - a key factor in a winning stock.

If you are short on time, another screen you might want to review each day is the IBD Timesaver table. This screen lists stocks that are up in price and that might deserve a new look. I know that Stockbee reported the other day that Dan Zanger watches a list like this to find stocks as well. Anyway, that's a quick tip for you that will hopefully answer your stock market investing question.

Distribution Day Stock

One of the first things you want to learn how to spot is a distribution day in the stock market. The first place you want to look for distribution is in the general market indexes. A distribution day is when sellers outnumber buyers. You can tell when it happens when an index closes lower on higher volume than the previous day. While a distribution day is not ideal, one in and of itself is not a big deal as the market does need time to rest from time to time. But, stack 3 to 5 days on top of each other and then it puts pressure on the market uptrend. This is when you'll want to start looking for a correction.

In the chart at the right, you can see that the stock closed significantly lower the other day on higher volume. This is what distribution looks like. Sellers outnumber buyers and when that happens the price falls. Sometimes this selling comes out of the blue and this one caught me unaware because of a surprise earnings announcement from another stock in the sector. But if I'd been paying closer attention, I would have spotted distribution a few days before. You can learn more in my post called What Is A Distribution Day.

This is the kind of thing that you'll learn to spot as you gain more experience. And, while in general I might have spotted it sooner, I learned the lesson a lot better because I had established a position in the stock and the loss smarts, simulated or not.

This is also a reason that I think that everyone would benefit from practicing in my Buying Stocks - A Case Study challenge. You'll learn to spot this more when it happens to a stock that you are actively following.

I know that I did. I hope that chart helps you spot distribution in a stock. Good luck on your stock market investing program.

Stock Market Today

The stock market today maintained it's uptrend with gains on all four major indexes all on higher volume. While the S&P 500, the Dow and the NYSE Composite all rose on higher volume that volume was lower than the 50 day average volume. The NASDAQ meanwhile rose on volume that was higher than the 50 day average volume. It was good to see the strength on that index. The news today was about the Federal Reserve easing monetary policy. I'm not exactly sure but if the Fed prints money that makes the dollar worth less. If the dollar is worth less, it might push the indexes higher just to maintain it's true value. I think that this is a good sign for the overall increase in the market indexes.

A day like today is easy to see exactly what happened because all indexes were up, and so was volume. Since the market is in a confirmed uptrend, I'm watching for distribution days that indicate institutional selling. I didn't buy any stocks today because yesterdays increase in the indexes was on low volume because of the holiday.

The NASDAQ was one of the stronger indexes in terms of volume in the stocks market today.

The first thing that I do everyday is check the market indexes. This is also the first information available from IBD. The charts of indexes are on the homepage on a 20 minute delay. Next comes the Big Picture column and then the IBD TV Market Wrap. Later in the day the actual paper is published and I take a look at the How's the Market page.

Because the market is still in an uptrend, it's still a good time to look for stocks. Keep an eye on your stock screens for opportunities that might emerge.

All in all, it was great to see the market go up. Keep an eye on the market each day. It can quickly turn.

Monday, October 11, 2010

Is The Stock Market Open On Columbus Day?

My friend I were hanging out this weekend and then he wondered is the stock market open on Columbus Day? The answer is yes. The holidays that it is closed are New Year's Day, Martin Luther King Day, Washington's Birthday/President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. This is where I found the current calendar for the NYSE. Market hours are from 9:30am - 4:00 pm daily.

While the market is open, even if it wasn't it's still a good time to further your stock market investing knowledge. I do this by re-reading How To Make Money in Stocks and by reading back issues of the Investor's Business Daily. Another good thing to do would be to watch the Daily Stock Analysis videos on IBD TV.

The other thing I like to do is to clean up my watch list and take the time to look for stocks approaching buy points. A good way to work on your skills is to read the IBD 100 and Weekly Review and look closely at the mini charts. A lot of times these charts have buy points listed. Reading these notes can help you figure out how to recognze bases as well as get better at finding pivot points.

I also take a look at my positions to look for signs of selling. This can come in a number of ways. One would be if the market turns into a correction. It could also show in the form of my stocks closing lower on higher volume (distribution) or closing higher on lower volume (stalling action). Start getting in the habit of looking at as many charts as you can. Charts are to you what an X-ray is to doctor. Use them to see how healthy your stocks are.

Another thing I think that's helpful to do is to review your investing checklists. Work to constantly fine tune them.

Well, since today's not a holiday, it's time to get moving.

Thursday, October 7, 2010

How To Buy Stock

This site is about learning how to buy stock. I've been a big believer that you can probably learn how to invest your money better than your broker. This is because your broker usually only tells you when to buy and never when to sell. Owning a stock forever and not selling it for a gain is probably the biggest myth of the stock market. Buy and hold. You've heard the advice before. This advice works great for mutual funds because the fund manager is actually buying AND selling the stocks. They aren't holding them forever. You shouldn't either.

That being said, perfecting the art of buying stocks is easier said than done. You will have to study the market daily. You'll have to set up a system that fits your personality and that eliminates the emotion of investing. But not only that, you'll need to set up a way to learn from your mistakes. Learning by doing is the only way. You can't sit on the sidelines.

Step one is to pick a strategy and stick to it. Make it your sole focus. You can't make money practicing 18 different techniques at once. You'll never master them all. Pick one that's proven to make money and get to work. That's why here, I only talk about CANSLIM for the time being because I am trying to master one specific proven strategy. This is key. There is no reason to recreate the wheel. Whether you pick CANSLIM or value investing or penny stocks or options it doesn't really matter. Just set out to master whatever strategy you choose.

Once you have done that, you've got to practice. You do this by using a simulator. This is what I've been building my series of articles around over the past several weeks. You can see the beginning here at this link: Buying Stocks - A Case Study. If you want to see my last four articles in the series here are the links.

Stocks To Buy Today
Best Stocks To Buy
Stocks To Buy
Good Stocks To Buy

In the processing of learning how to buy stock, you'll take some lumps on the way. Notice my red losses. This is what happens when you buy stocks extended to far from a proper buy point.

Before I learn how to buy stock online, I spend time in the gym so to speak. All the professionals do. From scrimmages in professional sports to airline pilots, all learn from practicing. And while real world experience is the best teacher, we live in a world where we can recreate real world conditions. This will save you money when learning how to buy stock. You can start by practicing. You can see what kind of mistakes that you will make. Then you'll repeat the learning process by using real cash. Because this again will require a learning curve as well, because let's face it, the practice field is not the real thing.

So what I would do is spend time setting up your daily stock market investing routine. For me, that means that I first check out the days market action. My rules say that I will only invest when the market is in a confirmed uptrend. The market is still in a confirmed uptrend so that's good.

The stocks I've been looking at make me feel like we are in a correction. But the market itself doesn't show that right now.

Next, I check out my stock market screens and today decided to add three stocks to my watch list. They were:


Well I guess that I only really added EMV as the other two were already on my list.

I've been suggesting that you build your watch list from one screen until you get the habit down. The IBD has so much information in it. After awhile, you'll expand it. Lately, I've been looking at the other screens. In particular, the Weekly Review and the Stocks in the News. Mainly because they have the mini charts. I also take note of the stocks mentioned in the Big Picture column. Many of these stocks will probably be stocks that you will probably have on your watch list.

Anyway, after that, I take a look at the stocks on my watch list and prune the list of stocks. For example today, I removed a stock that I'd taken a position in ARUN because it's Acc/Dist Rating was now a D. I also have to sell that stock as well.

My problem in unloading some of the stocks I've purchased is that the investopedia simulator has been down all week. I also sold FFIV. I've been using Wall Street Survivor as a back up and was able to unload it. I expected it to rebound today. It did by a few percent but not by a whole lot.

Today, I picked up PPO.

I've got a little added pressure to because a friend of mine decided to pick it up with real cash. We'll see how it does and he'll tell me if I really know how to buy stock. He already decided that you all should short the

Good luck!

Stock Market Today

I wanted to give my report on the stock market today. As is my customary routine, I like to check out the market action on the four major indexes to see the price and volume action for the day. As a reminder, I have a little routine that I do after the market closes. It takes a couple of hours to get all my data but here is what I do.

The first thing that I do is go to and check out the four major indexes. Those are the S&P 500, the Dow, the NYSE and the NASDAQ. This information is free by the way and you don't need to be a subscriber. The first three indexes price action for the day are all compared to the volume on the NYSE. The charts here show that without me having to look at a different chart. It's a small step but it saves a me having to remember it. The other thing is that the NYSE volume figures for the day are different than from other news outlets. Today for example volume on the NYSE according to IBD is 873 million shares but according to other outlets it was around 4 billion. This is because the 4 billion shares traded include all of the regional exchanges as well. Why the difference? Your guess is as good as mine, but I am guessing it's because this then puts greater weight on what the institutions volume is as a percentage of total volume. Otherwise, I'm not sure. But because the editors determine market direction from this figure I like to be consistent as well. FYI: NASDAQ volume for the day is pretty close to other news outlets but not exact.

The NASDAQ closed slightly higher today on lower volume. While not a distribution day, you'd rather see the index close higher on higher volume.

The market indexes were mixed today. The NASDAQ was up in lower volume and the other three indexes were lower in lower volume. This means that all four indexes dodged a distribution day today. The market remains in a confirmed uptrend with the NYSE standing with the most pressure at 3 distribution days.

It's important when you look at the market indexes to ask yourself, what happened? Determine for yourself exactly what kind of day it was. With the market in a confirmed uptrend, the question you want to ask is was it a distribution day. It wasn't which is good. What you hope to see is the market closing higher on higher volume.

Once you have figured out what you think happened, watch the IBD TV Market Wrap. This daily video is an awesome resource to help you spot what to look for. It will help confirm what you thought. If you were wrong make a note of today's action and remember that next time you see similar price and volume action, you'll know how to spot it.

I then swing over to read the Big Picture column. This column, along with the video is usually available before the actual paper. Read it to garner additional information like what the paper thinks are the current leaders in the market are. Make sure to consider them for your watch list.

According to what I heard, the market is awaiting the jobs report tomorrow and we've started entering some earnings results period as well. This could have an impact on the your stock market investing depending on what happens.

Wednesday, October 6, 2010

Good Stocks To Buy

Today is a tough day to look for good stocks to buy but as usual we are going to give it our best shot. As I continue my series on Buying Stocks - A Case Study, my first order of business is to take a look at the general market indexes and see if there is any change in the general market direction. Surprisingly, there was no distribution on any of the in major indexes. I say surprisingly because most of my stocks got hit pretty hard today. One specifically FFIV which I just purchased today dropped double digits. As is my current practice, I am only trading after hours and making all of my decisions after the market closes, I will put in a sell order to be executed at the market open. That's what happens though when you buy a stock that is extended to high from its buy point.

Anyway, if you are just joining me before I go on, I should catch you up buy giving you a few links to some of the previous four posts before I move on. You can find them by using these links.

Stocks To Buy
Best Stock To Buy Today
Stocks To Buy Today
Best Stocks To Buy

The one bright spot today is MSB. In that position, I'm up over 18%. Without much experience in how the market will react tomorrow, I'm thinking it will rebound somewhat consider the market as a whole volume was much lighter than the previous day. So, we'll see.

In checking my screens, it's probably no surprise that not many stocks showed heavy volume then, especially since it's more tech heavy. Most stocks then came from the NYSE side of the table. The stocks that met my screens today were:


Yesterday, I could have selected TPCG (up 5.44%) instead of FFIV (down 12.52%) so made an error there. However, it shows me my selection criteria are finding some good opportunities. It's the end user that needs to work on his picks.

Finding good stocks to buy is part fundamental and part technical. Finding the best buy point is the key factor.

I didn't really see much that I really liked but finally decided on PPO. It looks as if it broke out of a three weeks tight base on volume 50%+ higher than yesterday. While I'm still honing my chart reading skills to see which shares to buy today, I've put a chart here so you can see the breakout. (The volume on this chart is weekly but on a daily chart you'd see the slight surge in volume.) For me as far as good stocks to buy right now goes, it met my criteria and was close to a buy point as I could determine. The thing about chart reading is that you have to start by practicing and learning from your mistakes. That's what I'm doing here.

I've been learning a few things here that justifies going through the process of practicing 100 trades before I invest real cash. First and foremost is that the market is pretty unpredictable. I'll be watching my stocks carefully as several lost ground on higher volume. I'd tell you exactly but investopedia is still down. Pretty bad for a pretty good simulator. I guess that's what I get for that huge subscription I have been paying lol. Anyway, good luck finding good stocks to buy now and keep me posted on your stock market investing progress.

5 Stocks To Buy Right Now

Today, I wanted to give you my screens 5 stocks to buy right now results. This doesn't mean that they will indeed go up. These are just the five stocks that made my list today.


I found these stocks while trying to figure out which shares to buy today by reading Investors Business Daily's Stocks On The Move screen. After they show up there, I screen them for a few more characteristics to eliminate the stocks I want to review to a smaller number. This is what the game is all about, looking at the market, then looking at a smaller portion of it. Let your criteria for stocks be your guide and don't get frustrated if you see another stock go higher without it showing up on your screens. There are plenty of stocks to choose from - particularly in a market uptrend.

I've already established positions in ZBRA which I subsequently sold for a small loss and have 3 positions in EBIX which I continue to like. The stock I bought today was FFIV. F5 Networks. I like it's price performance so far and it seems to be under accumulation. I don't like the fact that it appears to be extended from a proper buy point. A better strategy would be to let it consolidate some of it's gains and let it establish a proper buy point.

From an investors point of view, waiting on a stock to consolidate is a tough thing to do sometime. I'm entering this stock knowing that it might not go higher and start forming a new base. One of the things that I will have to exercise after going through this case study is patience and waiting for the stock to perform a certain way first -- then buy.

For today though, I am consider it one of my best stocks to buy. Good luck on your stock market investing program.

Tuesday, October 5, 2010

Learn The Best Stocks To Buy

In my search for the best stocks to buy, I took a few days break to take care of every day life, you know, working and stuff. I'm back today and thought that I would do sort of a recap of my Buying Stocks - A Case Study and see exactly what I've learned so far. As usual, when starting my daily routine, the first thing I do is look at the stock market today and see what happened. I know lately, I've been getting the feeling that the market might have been turning a bit. It's easy to let your emotion help dictate the decisions that you make. You want to get in the habit of making the same stock market investing decisions regardless of your feelings. William O'Neil teaches this in his book How To Make Money in Stocks. Let the market tell you what to do.

Today, the market indexes all were up on higher volume. The IBD Market pulse still shows that the market is in a confirmed uptrend. While the NASDAQ has shown some distribution, the other indexes haven't suffered as much. I've been using a second indicator of how strong the market is and that's the number of stocks that show up on the Stocks on the Move screen. Today, the NYSE extended the whole list.

If you have read my previous posts, you'll know that I use this screen to build my watch list and have been looking for the best stocks to buy right now from this particular screen. Here are links to the last four posts in my series:

Buy Stocks Online
Stocks To Buy
Best Stock To Buy Today
Stocks To Buy Today

I am a big believer in keeping it simple and in keeping it easy. One way to do that is to reduce the amount of stuff I have to look at on a daily basis. If you have read the IBD, you'll know that the ideas for potential stocks to buy are basically on every page. I've decided that personally, I don't want to look at all of it, only a section. It's my opinion that any stock worth buying will appear on this screen.

Each day, I check this stock screen and select the stocks in bold. These are stocks with EPS and RS ratings of 80 or greater. Next, I put these symbols into My Stocks List. You can have up to five lists. The first one I've dubbed Research. I put the stocks symbols I find today into it and start reducing the number of stocks by some additional criteria.

I start by looking at today's price and volume, I sort it by percentage price change to see what was the strongest stock of the day. I then sort by volume and eliminate those stocks that don't have at least 100,000 in shares traded for the day.

After that, I then look at the Smart Select ratings and sort each column individually from highest to lowest. I eliminate all stocks that don't have 80 or greater ratings and any stocks rated B- or less. This usually knocks out a few more stocks off the list. If there is an N/A, I leave it on the list. Rightly or wrongly, that is what I decided to do in that case.

The next thing I do is look at the Fundamentals and eliminate all stocks that have less than 25% in any column. This eliminates a few more stocks.

Finally, I check each chart and based on some advice from Stockbee, I only focus on stocks that have less than 100 million in float.

This leaves me with a list of what might be the best stocks to buy now.

Today's screen left with me with the following stocks.


Once I have these I add them to my current watch list. To this point, I've put together the following watch list.


I also do a couple of things when I add new stocks to my watch list. The first thing I do is take a look at how the list as a whole performed today. Today, all of the stocks except for three were up from 1 to 5%. This tells me that I am on the right track that I am at least picking stocks that are going higher. Part of this probably has to do with the market trend. Remember that three out of four stocks follow it.

The second thing I do, is prune the list by sorting the stocks using the criteria above and eliminating those which don't fit my minimum thresholds. Today, I got rid of a few. You need a strategy for pruning your lists and this is mine.

OK. So now I have the best stocks to buy today, or at least the ones I've decided are. The next thing that I have started doing is looking at each stocks chart. If you use, you'll see that when you pull up a stock's chart, that it defaults to the daily view. I noticed that in his book, O'Neil uses weekly charts to find patterns like the cup with handle and the double bottom. Identifying these patterns will take some time and is one of the reasons that I recommend practicing daily to gain the experience that you need.

Finding the best stocks to buy also requires that you buy them at the best time.

While I can't claim expert status at reading charts, I feel pretty good that one of the patterns that I think I recognized was a double bottom with handle in EBIX. I was pretty confident that this was a breakout and IBD has recently confirmed it for me. As I recognized it, I actually bought three positions in EBIX of the ten that I've established so far.

I think that this is the hardest part of CANSLIM, identifying specific buy points. I suggest the following tips for beginning. Tip number one is to look at the weekly chart like I said above. Next, look for smooth charts and avoid the choppy ones and ones that have big gaps. After that, look for lots of accumulation in the last few weeks and steer clear of the ones that don't have it. Also, look back at previous highs and see how close the stock is to this level. A breakthrough on heavy volume through this point my be your buy point. Another thing I have been doing is looking for stocks that haven't extended to high although I have broken that rule a little bit particularly with OPEN.

Here are the stocks that I've picked up so far in my stock simulator.

EBIX up 4.21 percent today. I have three positions in EBIX and it's been paying off.

ZBRA up 3.82 percent today. I sold this position for a slight loss and moved it into EBIX because it wasn't moving. I liked the chart of EBIX.

ARUN up 3.78 percent today.

MSB up 3.34 percent today.

JKS up 3.33 percent today.

HMIN up 2.76 percent today.

NFLX down .15 percent today.

OPEN down .91 percent today.

I'd give you the exact gains or losses since I picked them up but but as has been a disappointing problem with that site is that it's down quite a bit. I do know that a couple of my positions are up double digits and don't think that any are down. I am in search of a better simulator.

The other thing I want to do is pay closer attention to the charts that I own looking for signs of weakness. I did do that with ZBRA and didn't see any real accumulation going on there like in EBIX and that's why I moved that position.

Once I get done with my 100 practice stocks, it's time to move onto real cash. I've opened an account with TD Ameritrade for that purpose. Good luck in finding your best stocks to buy and keep me posted on your progress.