What makes a stock go up? The answer might surprise you. Watch the video to find out!
Disclaimer: This is not a buy recommendation for any of the stocks mentioned in the video. Purchasing stocks involves financial risk and
must be involved to protect capital.
In the video, I describe finding stocks with winning characteristics: higher than average weekly volume, a new price high with a trend line moving upward. I also want to emphasize that a good time to buy stocks with those characteristics is after a pullback or consolidation of the price.
Looking at one of the charts I talk about in the video, Chipolte Mexican Grill (CMG) which has had a 296% gain over just over two years, you can see that several of the occurrences of popularity happen after the price has pulled back or have been stuck in a price range for a while. Looking at the chart below, this happened in July 2010, February 2011 and September 2011. The point I want to make is the powerfulness of the three characteristics is stronger after a price pullback or consolidation.
I also want to point out that this trend trading strategy is not the "holy grail" and that the experience won't always turn out the way it did with CMG. But, when these aspects of what makes a stock go up - show up they are worth considering as a higher probability that a stock will go up.
Below, please find the resources I promised for finding free charts and lists of stocks that may be exhibiting the characteristics of a real winner.
Free Resources for Finding Popular Stocks
StockCharts.com is a terrific resource for charts and they offer predefined scan for looking for good stocks. Here's the webpage for their predefined scans for 52-week highs and strong volume gainers:
Look at a weekly chart of your stock. Most stock charting programs will let you add a simple moving average (SMA or MA) to your chart. You can adjust the time period to 50 and look for that trend line.
The three things to look for on the stock chart are: