Once you have isolated the very best companies via a custom screening and have done a detailed comparison of each company’s key variables, you need ot determine when is the absolute best time to buy their stock. At what point, in other words, does the stock stand the best chance of increasing in price soon and becoming a potential big winner? This does not mean when the stock is cheapest; it means when its percentage chance of significant success is greatest.
By far, the easiest and most efficient way to make this determination is by using charts along with your fundamental data. Big hedge funds who have a clear edge in fundamental analysis and manage hundred of millions can rely almost everything in fundamentals but the individual investor must use the edge of trading speed at its favor. The small investor must buy the stocks that hedge funds are currently buying but he must do so at the right price, the one that tells you that a potential uptrend is about to start. Remember, this is not easy to master and requires several years and practice.
Almost all patterns are built because of a correction, or decline, in the general market indexes. In a sense, market corrections can be viewed as healthy for the future, because they are building the new patterns from which leading stocks can emerge refreshed a few months later. But you have got to stay awake to recognize them. Retail stocks, for example, may be poor choices at one point, but several weeks later can suddenly complete sound patterns and blossom into leaders. To capitalize, you need to be there, seeing the change when it happens. It’s like anything else: your are either on top of your job or you are not.
This is a list of stocks that hedge funds are currently buying because they are holding better than the rest of the market or stocks in their industries. In addition these stocks show clear institutional buying, for example:
- Accumulation volume: increased volume when the stock goes up but lower volume when the market or the stock fell.
- Volatility contraction: Institutions quietly buying at a specific price level before the stock starts rising considerably.
- Tight ranges: The market went down almost 9% from highs to lows but the stock held very well and sellers did not appear during the whole correction. This shows lack of selling interest in the stock
This is the list of stocks I will focus during the week and hope to send alerts to my email subscribers when I am buying them.
Bank of America (BAC)
Cimarex Energy (XEC)
Super Micro Computer (SMCI)
Pep Boys (PBY)
First Solar (FSLR)
Yum! Brands (YUM)
Intuitive Surgical (ISRG)
Vitamin Shoppe (VSI)
US Steel (X)
Ellie Mae (ELLI)
O Reilly Automotive (ORLY)