The Best Thing You Can Do Now
The market handed out another
juicy morsel that buying stocks is the best way to go right now. We saw most major indices rally almost 2% in heavier volume than
Monday and also above average.
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Buying stocks may be the
right thing to do right now, but it still must be done with discipline and a
solid set of rules in place. Growth
stocks have acted superb as the market has been led higher by the Internet and
Medical sectors, but jumping in at any time could result in a tricky
situation.
Take J2
Global’s
(
JCOM |
Quote |
Chart |
News |
PowerRating) action from Tuesday for example. The
stock gapped down about 12%, but that occurred after the stock emerged from a
solid base in late March and has advanced 18% even after Tuesday’s close. In this instance, buying right resulted in as much as a 30% benefit to
a portfolio vs. buying wrong.
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Hailing from the strong
mortgage business, New Century
(
NCEN |
Quote |
Chart |
News |
PowerRating) showed us that breakouts are still
strong in the growth sector. It
made its initial move through 34.80 yesterday, and was followed up Tuesday,
although volume was lighter.
Something we haven’t seen
in any of the past three years of bear market bounces are a good growth stock
continually building on its initial gains. Able Labs
(
ABRX |
Quote |
Chart |
News |
PowerRating) is such a stock following its 4/14 move.
Nothing is certain in the
stock market. The best we can do
is put every odd in our favor, based on what has consistently worked, and then
move forward with loss-cutting measures in place. Right now is a great time to spend time or resources researching stocks
and looking for good names to put in your portfolio at the correct time.
If you’ve spotted some big winners from leading groups like Internet
Service Providers or E-commerce but can’t find a way in, be patient. In my experience, most truly great winners will offer more than one
lower-risk entry point to take advantage of. The best thing to do in the meanwhile is arm yourself with enough
knowledge to recognize the next entry point.
Good Trading,