My Four Basic Investment Criteria

  • September 2, 2003
  • Tim Truebenbach

What more can growth investors
ask for?  The major averages are firing on all cylinders.  I really
didn’t think institutions would step it up as much as they did on Tuesday
since it is a shorter week, but that was not the case. We saw enough power to
drive the leading Nasdaq ahead by 1.7% on above-average volume.


image src=”https://tradingmarkets.com/media/2003/Tim/tt090203-01.gif” width=”382″ height=”325″ />

We have also been fortunate enough to see individual
stocks break out of sound base patterns and push higher. 
Safenet
(
SFNT |
Quote |
Chart |
News |
PowerRating) is a recent example as
it surged through 36.58.  The company has triple-digit earnings and sales
growth rates, but is lacking in its annual earnings growth consistency as well
as Return on Equity.  All of these factors usually play into a large potential
winner.


image src=”https://tradingmarkets.com/media/2003/Tim/tt090203-02.gif” width=”382″ height=”327″ />

Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating)
pushed through a double-bottom base pattern at 33.97.  We all know this
company quite well.


image src=”https://tradingmarkets.com/media/2003/Tim/tt090203-03.gif” width=”382″ height=”325″ />

Meanwhile, we are still seeing some of the past leaders
like J2 Global
(
JCOM |
Quote |
Chart |
News |
PowerRating) launch to new
highs.  Technically speaking, this may be a stock to keep an eye on since
today’s move was the biggest of its run, although volume was not its biggest
ever.


image src=”https://tradingmarkets.com/media/2003/Tim/tt090203-04.gif” width=”380″ height=”327″ />

We are seeing many new names set up as well, and include
stocks like Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating). 


image src=”https://tradingmarkets.com/media/2003/Tim/tt090203-05.gif” width=”383″ height=”327″ />

As I assess when and where to make an investment, I
always look to these basic criteria:

  1. Is the market in a confirmed rally?

  2. Am I looking at a stock in a leading group?

  3. How strong is the company’s financials?

  4. Is the stock offering me an ideal Buy Point?

The first question has been a resounding “Yes”.  Leading
groups remain the Internets, medicals and semiconductors.  The next two steps
are yours!

Until Thursday,

Tim Truebenbach