Group items tagged

With the stock market turning volatile this year, many stocks have formed base-on-base patterns. Keep an eye out for those, because they tend to be strong chart formations. The base-on-base is, of course, a combination of two bases.

With the stock market turning volatile this year, many stocks have formed base-on-base patterns. Keep an eye out for those, because they tend to be strong chart formations. The base-on-base is, of course, a combination of two bases. The stock forms a base but does not rise much in price from the buy point. That's often because the general market comes under selling.

We are familiar with basic terminologies such as the bull market, bear market, and correction. In simple terms, a "bull market" is when the market moves higher and a "bear market" is when the market moves lower. However, one needs to understand that a new follow-through day and short-term uptrend do not necessarily signal a bull market. Similarly, short-term downtrend does not necessarily indicate a new bear market. These are common stock market misconceptions.

"What seems too high in price and risky to the majority usually goes higher, and what seems low and cheap usually goes lower." - William J. O'Neil

We all know the importance of market status in determining an investor's stance in the CANSLIM style. It not only helps you realize gains by being aggressive when the risk is minimal but also protects you from unwarranted risks of markets.

We all know the importance of market status in determining an investor's stance in the CANSLIM style. It not only helps you realize gains by being aggressive when the risk is minimal but also protects you from unwarranted risks of markets.

Apart from picking right stocks to buy, exposure management plays an important role in the overall returns achieved. It is advised to increase exposure toward winners and decrease toward losing stocks. A sound exposure management strategy not only curtails risk but also keeps you aggressively invested in the market when the chances of gains are high. However, it only works well in the long run if the strategy is rule-based. CANSLIM provides a perfect objective system which is summarised below:

How do you use relative price strength to pick stocks?

So, you missed a stock at its breakout. But since it boasts strong fundamental and technical ratings across the board, it's OK to chase it beyond the buy zone, right?