When it comes to finding excellent stocks that have a high potential for making very large moves I have a system that I use to select from. To find the information that I need, I use the Bigcharts service by MarketWatch (www.Bigcharts.com). I go to the section called "Big Reports". I go to the section for largest percentage increase in volume. This displays for me a mosaic of stock charts on both the Canada and US markets, for all major stock indices. Once a week I browse through the charts for all five of the last trading days. What I am specifically looking for are not only stocks that appear to be trending upward, to show a marked increase over its normal trading volume. When I find a good prospect I click on the mosaic icon to open up its full size chart. The first thing I look for is a stock that’s trading at or near its all-time high. This is because I wished to eliminate those day-in, day-out moves that in the scope of things are really meaningless. However, if the stock is continuing to make you highest with large increases in volume it is probably something significant.
Once I have located this prospect, I detailed a little deeper into the particulars of stock. By clicking on the "printer friendly format" of the chart screen I can see at a glance all of the stock and company particulars. While not a hard and fast rule I have found that the stocks with the most potential to make an explosive up move part of those that have less than 25 million shares outstanding, and the capitalization of less than $750 million. I will, however, deviate from this guideline if I feel a strong enough volume increased/stock movement warrants this.
My goal is to collect a printout of the very best stocks that meet these criteria, which I can print out and post on my corkboard. It is from this list (which I then follow each week) that I pick the best one or two stocks from the group.
This method gives me a very reasonable chance at finding a explosive high potential stocks. It is, of course, not foolproof. Even when I find what I am sure will be a sure thing winner, I always use stop losses, and never risk more than 2% of my total portfolio on any position. I can always find new winners, so I am not afraid of letting trades pass. However, decimating my account by a careless position will not allow me to trade tomorrow.
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Kevin J. Mulholland has been a computer instructor and consultant for more than 16 years near Toronto, Canada, where he lives with his wife and son. He continues to share his professional expertise through many forums. His information sites include:
CreateaFreeWebsites.com
- Step-by-step instructions for creating your webpage.
WebHitCounterFree.com
- How to add buttons, counters and professional-looking items to your webpage.
Free Web Site Traffic Promotions
- How to get traffic to your website.
Find the best site for free space for web site
- Step-by-step instructions for getting your files online (for free, of course).
The Best Swing Trading Indicator
- Great Trading Information to Grow Your Money
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