Stock Trending
Which way is the stock going? My trading style is typically to follow the market. When a stock is trending up I trade stocks up (long) and when the stock is trending down I trade stocks down (short). I hold stocks only as long as they are making money. If they reverse then I sell.
When I look for stocks trending up I look for the following parameters:
Price: I like the price between $0.65 and $4.25 per share. I have found through backtestings that people are willing to bid these stocks up faster than higher priced stocks.
Growth: I like stocks in their initial growth or recovery mode. I look for a growth rate in the last 1-3 months of at zero or below zero and have increased to 12% or better. This means that the company is making money.
Sales Growth: This is the sales growth of the company. This one is not as important as the growth above but I like to see that the sales over the last 9 months has some increases in it. If the sales is flat or decreasing and the growth is increasing, that means that the growth above is from cost cutting and not from increasing profits and continued growth can't go very long in this mode.
Earnings Per Share (EPS): I also like this one just to see what the earnings are like over the last 9 months. As stated above this does not tell me if earnings are from cost cutting or from true growth. To determine this you must refere to Growth and Sales Growth.
50 Day Average Volume: If this parameter is increasing and the price of the stock is moving up then you usually have a winner. The price will continue to go up. I only buy stocks where the average volume is greater than 10,000 shares and I will sell this stock if the 50 day moving average falls below 9,000 shares. It does no good to have a stock increasing in value and not be able to sell the shares on a drop in price.
Look for Stock trending up from the above search. When you find these stocks put them in a watch list called Stock Trending to watch them for an opportunity to buy.
Stock Trending Tools: One of the good database sites which is updated every day where you can sort for stock trending up is listed below:
VectorVest
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