BuyingStocks Print HI - Investor's Business Daily

BUYING STOCKS 3 Things to Check Before You Buy

1: CHECK THE MARKET DIRECTION

Wait for the green light.

CONFIRMED UPTREND

The best time to buy stocks. The optimal strategy is to buy

companies with solid earnings and sales that are clearing a

price consolidation.

UPTREND UNDER PRESSURE

Proceed with caution. Consider buying

top-performing stocks, but know that your risk will be

greater.

MARKET IN CORRECTION

Avoid new buys. Use this time to compile a watchlist of superior stocks.

See The Big Picture at

2: CHECK THE COMPANY

Give the stock a thorough inspection.

Keep in mind, few stocks will meet or exceed every benchmark here... and that's okay! You want to focus on the very best stocks, not settle for lesser ones. In this case, it's good to be picky.

Key Factors to Consider:

IBD? COMPOSITE RATING: 95+ EPS (Earnings Per Share) RATING: 90+ EPS % CHANGE LAST QUARTER: 25%+ LAST 3 QUARTERS AVERAGE EPS GROWTH: 35%+ QUARTERS OF EPS ACCELERATION: 1 or more SALES GROWTH LAST QUARTER: 20%+ RETURN ON EQUITY (ROE): 17%+ SMR RATING? (Sales, Margins, ROE): A or B

NEW PRODUCT, SERVICE OR MANAGEMENT: Yes ONE OF TOP-RATED STOCKS IN GROUP: Yes INDUSTRY GROUP RANK: In the top 40 of total 197 QUARTERS OF INCREASING FUND OWNERSHIP: 1+ ACCUMULATION/DISTRIBUTION RATING: A, B, or C RELATIVE PRICE STRENGTH RATING: 75+ CURRENT SHARE PRICE: $15+ AVERAGE DAILY VOLUME: 400,000+ SHARES

To get an overall rating of your stock, go to stock-checkup

3: CHECK THE CHART

Wait for a Breakout Day.

Now that the market looks good and your stock checks out, there's one last thing to do:

wait for the stock to break out.

1 Be on the lookout for a Base Pattern

2 Wait for the stock to reach a Buy Point

Cup with Handle

Double Bottom

Flat Base

3

Check for a 40% Volume Increase from previous day

4 Look for a Relative Strength Line that is at

or near a new high

DID YOU KNOW?

The best stocks throughout history have followed specific growth patterns just before they broke out and made huge gains.

The key to spotting base patterns is stock chart analysis. Use IBD? Charts to accomplish these steps in just minutes.

BUY SMARTER

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