Cheap Stocks That Are Pulling Back in Up Trends

Buy the dips. That’s a popular investment strategy. It is a popular strategy because it works. But, like almost every investment strategy, it only works sometimes. Buying the dips is only an effective strategy when the dip is actually just a dip within an up trend and not the beginning of a new bear market. So, like with all investment strategies, it can be useful to define rules so that we know when to buy and when to avoid buying. For this strategy, we will need to identify rules that define the idea of a dip and an up trend. Let’s start ...
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What the Charts Say Now

Charts can be useful for all investors. Whether you are a technical analyst or a skeptic of technical analysts, charts can be useful because they offer a visual representation of the recent market action. Reviewing charts can simply offer an insight into market action. To do this, it is important to use simple charts. Some chartists add a dizzying array of indicators to charts. More often than not, this creates confusion and conflicting signals. To avoid this, just one or two indicators should be added to a chart. When two are used, they should measure different factors. In the charts below, we ...
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The Best Trades for July, After Beating the Market in June

At the beginning of the year, we began sharing real time buy recommendations with you for a successful trading strategy. This month, we continue with that process and we also continue reporting our results. The strategy is among the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, we are running a scan to find the stocks with the best historical performance in the month. Our Simple Strategy That’s Beating the Market To find trades for ...
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Trading Like a Quant

Employees are increasingly concerned that robots are coming to take away their jobs. This is being seen in factories, restaurants and retailers. Driverless cars and trucks threaten the entire transportation industry. While many think that only jobs paying low wages are at risk, that is not the case. Many of Wall Street’s jobs are threatened by robots, including some of the jobs with the highest pay. For many years, successful hedge fund managers have been rewarded with annual compensation measured in hundreds of millions or even billions of dollars. Now, their jobs may not be so secure. On Wall Street, the robots ...
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A Strategy For High Probability, Small Gains

There’s an old saying that “slow and steady wins the race.” Of course, there are always different interpretations to these old sayings. But, this bit of wisdom can be applied as investment advice. Many new traders dream of finding a stock that gains 100% in a matter of weeks and rolling those gains into another stock that delivers a gain of more than 100% within a few weeks. They dream of this process continuing, month after month. And, soon, in their dreams they are living on a private island. That is certainly a possibility. But, there are other ways to find success ...
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Adding Relative Strength to Value

Recently, a reader made a comment on one of our articles about value stocks. The reader agreed that the stocks sounded like good investment opportunities but wondered when the stocks were likely to move. To answer that question, we need to look beyond value. Another investment tool, relative strength (RS), is better suited for that answer. RS is a term used by technical analysts. It is a measure of comparative performance. In other words, RS answers the question of whether or not a stock or an ETF is outperforming the market. If the stock is beating the market, it is said ...
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Low-Priced Income Stocks With Double-Digit Growth Potential

The Federal Reserve seems to be following a disciplined but slow policy of increasing interest rates. According to officials quoted in the financial media that seem to be familiar with the Fed’s policy making process, the Fed could raise the Fed Funds rate to more than 1.5% by the end of the year, well above the record low near 0% but well below what investors would like to earn on short term deposits. The Fed Funds rate is the benchmark short term rate the Fed sets. This is technically the interest rate that banks and credit unions charge other depository institutions ...
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Trading Amazon, With Low Risk And a Small Amount of Money

Amazon.com, Inc. (Nasdaq: AMZN) has been one of the best performing stocks of all time. Since its initial public offering (IPO) in 1997, the stock has delivered gains of more than 63,000%. But, when looking at a long-term chart of the stock, it is reasonable to ask if anyone other than Jeff Bezos, the company’s CEO, has held the stock since its IPO. When looking at the chart, the size of the gain is the most obvious feature. The stock appears to have gone virtually straight up for more than twenty years. The next chart takes a different view. Looking at ...
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