So today I decided that the best stock to buy right now is Walter Energy, Inc. (NYSE: WLT). WLT broke out today up 4.16% on volume 132.77 % higher than average. It closed today at $115.12. It sports IBD Smart Select Ratings of 80+ and A or B. Earnings are up 471% over the prior quarter. While I like the stock's ratings, I do have to say that I'd prefer to buy a stock that is priced in the $15 to $50 dollar range. But of all the stocks today, I felt it was the best one to buy based on it's technical chart. It broke through what I considered to be a long term price resistance today on strong volume.
This is the first stock that I will be purchasing with real cash. As you might know, I had been using a stock simulator up until this point. As you might also know, I am a strong advocate of investing with real cash as soon as possible. Practice as long as you feel is necessary. For me, I am ready to move to real cash and learn from real market action. This is the best teacher.
While there are many opinions on how much cash you should invest, if you are just starting out, you are going to have to bend the rules as far as the recommended position sizes go. What I decided for me was that I would invest in a $1000 block for my first trade. What this means is that I can purchase 8 shares of WLT.
I am going to set up a profit target of 20%. This will make my target sale price ($115.12 times 1.2) or $138.14. At the same time, my loss limit will be 7% of my purchase price ($115.12 times .93) or $107.16. I will only be invested in one stock at a time.
I'll keep you posted on my first stock market investing purchase with real cash. Good luck on your own.