Stock Trading Predictions & Technical Analysis: Quick Tip on how to find Hot Stocks in an Up Trend

Friday, November 6, 2009

Quick Tip on how to find Hot Stocks in an Up Trend

Although this may not be much of a tip, as this is what I first did when I started trading, but eventually started to look at it less and less, is monitoring Daily and Weekly Top Gainers to find good stock candidates. I use to look at this everyday, but have been doing so less and less lately, but I believe it is important to check this every time. This is how I decided to take a long position with SBUX today, which was one of the day's top gainers. SBUX was among other stocks such as NVDA to have a breakout and therefore a BUY SIGNAL today. If you monitor this everyday, you may start noticing that some stocks will show up more often than others, and this usually indicates it's in a strong uptrend. I think it is a great way of finding great stocks for your portfolio. Although you may not want to take a position in a stock that just moved +25% in a day, you may want to look at others who are less volatile. This doesn't mean the +25% stock won't move even higher, but it may be safer to go with less volatility. Basically, what I'm saying is from this list of top gainers, you should then start checking out the charts of each of them and see if there are any opportunities. That's how I noticed SBUX today and decided to take a long position. I will now try just like I use to when I started trading, to monitor the top gainers on a daily basis to find the greatest opportunities.

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.