life ideas

August 23, 2007

stock swing knowledge

Filed under: Uncategorized — manoftoday @ 11:39 pm

Pick stock

Wait until the stock market sells off hard for a few days. Now go through the stocks on your watch list. Which ones are up for the day that the market has sold off? Those stocks have relative strength and those are the ones that you should trading. Why? Because these stocks will be the ones that will move first when the market recovers and will make the most significant gains.

Pick Industry

Also, look at charts for the various industry groups. Which ones are up on big down days in the market? Those industry groups have relative strength and those are the ones you want to be in.

This is completely the opposite on the short side. On big up days in the market look for the industry groups and stocks that are down for the day. These are weakest and the ones that you should be focused on for shorting.

Do not underestimate the simplicity of this technique! If you mainly trade on the long side of the market, use the down days in the market to go through your watch list. Find the stocks that are up for the day, showing relative strength. Then wait for the right time to enter the stock.


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