Tuesday, October 12, 2010

Good Stock Market Buys

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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.

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