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What Are Some Of The Best Investment Strategies?

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By Author: Marketsmith India
Total Articles: 35
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We at William O’ Neil believe that there are 3 basic steps that come handy when taking new positions:

Step 1: Proper Fundamental Analysis of Stocks

It is the fundamental strength of a stock that fuels it’s rally. You, as an investor, need to pay attention to the company’s growth trends, their return on equities, and profit margins to get a clear picture of the company’s performance.

Investors can gauge the appropriate use of shareholder’s equity by looking at the fundamentals. These stocks would ideally be those that meet the CANSLIM attributes such as strong earnings and sales growth, growing institutional sponsorships, and the rising demand for the stock.

Step 2: Consider Market Direction

The stock market prices are volatile, but the market direction provides us with a very velar insight as to where the prices will be heading for. Through our extensive research, we have found out that 75% of the stocks follow the market direction, i.e. if the market is in a downtrend, the stocks will also tend to drop their prices. On the other hand, if the market is in an uptrend, it signals the ...
... investor to look forward to new investing prospects.

Step 3: Reaping optimal returns

You have now successfully identified the fundamentals and know the market directions pretty well, but it is also important for you to find the right time to purchase/sell an investment. To find this, you need to perform a technical analysis of your stock and determine the perfect point to perform a transaction to maximize your investment gains. The CANSLIM model helps you in identifying the key factors involved.

The right time to buy any quality stock would be when it breaks out from a sound base pattern such as cup-with-handle, double bottom, or a flat base. On the day a stock breaks out, the trading volume should increase at least 50% above its 50-day average volume.

On the other hand, the right time to sell a stock would be when it drops below 8% of its purchase point. You can refer to the in-depth analysis of when to sell stock from here.

To get more share market tips, visit www.marketsmithindia.com. We offer various insights to these stocks which will help you in making good sound investments.

More About the Author

Investment advisory product based on William O’Neil’s CAN SLIM method with model portfolio, pattern recognition, idea lists powered by institutional quality data

Total Views: 321Word Count: 367See All articles From Author

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