Review of How to Select Stocks to Buy
Now, based on the technique that I have shared with you, I have come up with several stocks that are on an uptrend or about to breakout, which are two signals that you should anticipate to buy when the numbers and indicators are right. Let me summarize how to select stocks to buy as follows:
- Check the general trend (Should be uptrend or at least sideways)
- Look for stocks that are on an uptrend or about to breakout
- Check th target price of the selected stocks (Should have room for gain)
- Check the 16-, 32- and 65-day moving averages (Stock should be at least above the 32-d and 65-d MA)
- Check the volume of shares (Should be increasing or at least not decreasing)
- Check the MACD (Should be positive to indicate market is gaining momentum)
- Check the RSI (Should be 55% or below indicating the stock is not overbought)
So, now that all the indicators that we've mentioned above are met, when do I actually buy? Well, you buy an uptrend or a breakout so let me explain the two scenarios.
If it is an uptrend, you should enter ONLY when the stock bounces off the uptrend line. Some people make the mistake of buying when it is approaching the trend line going down. If you buy a stock approaching a trend line and the trend line is actually breached (it means, it's not an uptrend anymore), you'll end up losing money. Buying at the bounce off a trend line will lessen the risk of buying a stock that is losing momentum or starting to change trend.
If it's a breakout, you buy the moment it breaks out of the area pattern and as close to it as possible (I will write another post to explain the different break out patterns in the future).
That's it!
My Stocks Watch List (only for this coming week of Nov 12-19, 2010)
DRUM ROLL........... Tatatataaan! Here's My Stocks Watch list and I'd like to share it with you so I can spare you the time to check those numerous stocks graphs. Now before you buy, please please check your numbers first! Check the target price, MAs, Volume, MACD and RSI and if all number indicate a go, then buy at the right time which I just described in the last paragraph. So, here is My Stocks Watch List which is only for this coming week of November 12-19, 2010. It might change altogether in a week's time.
Stocks on an Uptrend
- Ayala Land Inc. (ALI)
- Bank of the Philippine Islands (BPI)
- Jollibee Foods Corporation (JFC)
- JG Summit (JGS)
- Metropolitan Bank and Trust Company (MBT)
- Manila Water Company (MWC)
- Robinson's Land Corporation (RLC)
- SM (SM)
Stocks About to Breakout
- Ayala Land Inc. (ALI) - 14% potential gain
- Engineering Equipment Inc. (EEI) - 12% potential gain
- Empire East Land Holdings (ELI) - 16% potential gain
- Filinvest Land Inc. (FLI) - 11% potential gain
- GMA News Network (GMA7) - 16% potential gain
- Philex Mining (PX) - 17% potential gain
- SM Prime Holdings (SMPH) - 11% potential gain
BONUS: Cheap (I have a good feeling) Stocks
I don't know why I'm doing this but I guess I want you to know how I feel about these "special stocks of mine" which I believe will amount to something (big win or loss. Hehe). You check the numbers and buy at your own risk because I don't have any basis at all! Haha. (Joke time...) But really, they look very cheap after they fell very deep! So here goes.
- Energy Development Corporation (EDC)
- DM Consunji (DMC)
- FirstGen Corporation (FGEN)
- Intenational Container Terminal Services Inc. (ICT)
- Megaworld Corporation (MEG)
- Meralco (MER)
- Metro Pacific Investments (MPI)
So, are you ready to buy when the signals are right? Which ones do you intend to buy if ever? Do share your thoughts by leaving a comment.
May you achieve true success!
Bryan
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