Before you buy a stock, first examine
its industry index to determine if the sector is in an up trend. You will
increase your winning percentage because being in the right sector is just as
(if not more) important than picking the right stock. Here’s a simple technique
to determine whether a sector is in a bullish mode and a stock purchase is
- Calculate a 50-day moving average
of the industry index.
- Buy the stock only when the sector
closes above its 50-day moving average.
Ochoa, from the TradingMarkets.com
Guide to Conquering the Trading Markets (1999, M. Gordon Publishing,