Large cap stocks can be among the safest stock market investments. These are large companies and are known as blue chip investments. A blue chip company is defined as “a nationally recognized, well-established, and financially sound company. Blue chips generally sell high-quality, widely accepted products and services.” Analysts note that “blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.” And, as a matter of interest, the name "blue chip" come...

In general, we like to see stocks going up and dread extended declines. Although individual investors will all have different time frames they consider, they tend to define an up trend as a series of rising prices in their preferred time frame. Likewise, a down trend will consist of a series of lower prices. Technical analysts generally define a down trend as a series of lower highs and lower lows. The chart pattern is generally clear when a down trend develops as the chart below demonstrates. Arrows demonstrate that for the majority of the time period shown, the stock has been making lo...

Technical analysis is the study of prices. Proponents of the discipline argue that history has a tendency to repeat and a study of market action in the past can be a useful tool for forecasting the likely direction of price trends in the future. This article will provide you information about Best technical trading strategies. Technicians use price charts and various indicators to develop their forecasts. Price charts are studied to determine if there are any significant visual cues that can be used to identify potential trends. This is a subjective form of analysis because each analyst wil...

One of the greatest investment books ever published was written by a professional dancer. The 1960 book, How I Made $2,000,000 in the Stock Market, was written by Nicolas Darvas. Other than his books, little is known about Darvas. His Wikipedia page provides a brief biography of his early years: Hungarian by birth, Darvas trained as an economist at the University of Budapest. Reluctant to remain in Hungary until either the Nazis or the Soviet Union took over, he fled in June 1943 at the age of 23 with a forged exit visa and fifty pounds sterling to Istanbul, Turkey. Sometime later, he met u...

As investors we hear it all the time. The analyst comes on CNBC and tells us a stock is soaring because the company beat earnings estimates. Or, we notice a stock is falling sharply and when we search the news we discover that the company missed analysts’ expectations. These are common explanations for a stock’s market action. But, what do those words really mean? In other words, what are estimates, where do they come from, how often do companies meet the estimates and how do stocks fare, on average after an earnings announcement? We will answer each of these questions today. What Are E...

One big story keeps coming up in the stock market. It’s tax reform. Analysts are still sorting through the implications of the new rules but there is a general agreement that changes to the tax code are bullish for most companies. This week, we searched for individual companies that analysts believe could be winners under tax reform. We searched our database for companies that are followed by at least four different Wall Street analysts and are priced below $20 a share. Then, we looked for companies where at least one analyst raised their earnings per share (EPS) estimate by at least 5% ...

Over the past year, we have shared trades based on a seasonal strategy. At the beginning of every month, we provided real time buy recommendations and we also tracked the results of the previous month’s recommendations. Now, after a year, we are able to show you the results for the past twelve months. This system was based on one of 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, every month...

Right now, the stock market has been in an up trend for years and hasn’t suffered a pull back of 5% or more in more than a year. This seems like we could be near a significant top. And, that means now might not be the ideal time to buy new stocks. Of course, those same words could have been written at any time in the past few months. Not buying may seem like a cautious approach to take to the market, especially when it is going up. But, not buying carries perhaps the biggest risk to small investors. The arguments against buying have been in place for more than a year. In fact, most of th...

Some investors seem to spend most of their time deciding what to buy. They should probably be spending an equal amount of time thinking about when they will sell. This might be uncomfortable because some investors associate selling with being wrong. The idea of selling losers is well known in stock market trading. There is the famous saying of “let winners run and cut losses quickly.” This idea is sometimes applied only to the initial purchase. Many investors are familiar with the idea of a “stop loss” which is a sell order that kicks in when the price falls by a predetermined amount. Th...