Traits
If you can find at least three of the following characteristics in a stock, the chances are you
will pick a winner:
■ Rising price trend as more and more investors jump aboard.
■ Rising volume as investors become more aggressive in their
purchases.
■ Strong, but not excessive, price momentum.Anything higher
indicates that supply and demand got out of synch.
■ Strong sector. If the sector is doing well, there is likely to be
enough business for all stocks in it.
■ Strong market. A rising tide raises most boats.
■ Supportive environment. Low input prices, high output prices,
low cost of doing business, and favorable supply and demand in
the industry.
Why go up and down?
The majority of investors are usually most optimistic at a market top
and most pessimistic at a market bottom. The more optimistic or pessimistic
the majority is, generally, the more ......