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May 25, 2010
Edited: May 25, 2010
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There are all kind of technical indicators the best and simplest one is price and volume. All indicators are just derivatives of these two elements. I used to use multiple indicators. I have cut down to three. Volume, STOCHASTIC and MACD.
One can buy stocks showing RSI or with 10% of high or when buying beaten down stocks is when volume dries up and follows with a big up volume day - meaning reversal signal. One can wait 3 to 5 days and wait for slight pull back and normally make money if one can hold for next 30 days. It has worked for me in about 75% of trades. there is no magic bullett which works 100% of the time
I failed to use this principle for MON and normally had pain. I like every one get attracted to beaten down stocks. I had a number of false starts on Monsanto - MON. It is a good company and stock is under distribution. It is off 65% from 2008 high of 134 plus - trading around 54.5. If one has lot of money one can buy and hold for next two years and make money. Failures are stepping stone to next success if one follows the rules and use the knowledge for next trade. So I am moving a number of stocks on buy watch list.
Some of the stocks showing relative streangth are
AZO, SNDK, ORLY, ALK, VCI, AAP, FFIV, DDS, DPS RMBS, TGT, WFMI,
These stocks bucked the market down trend and even made money on a day like today.
Please do your home work and use what ever method works for you. Nothing beats a good system which makes money for you. Please do paper trades or use this site to test out your theories. No margin calls here.