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{ 2008 05 24 }

How Do I Pick My Stocks?

I received a question from a reader asking how I pick my stocks. Here are just a FEW ways I go about doing this:

I have several stock scans looking at different oversold situations. On the chart I look for oversold RSI (2)s. I like to use shorter term indicators to predict price [like the RSI (2)] and use longer term indicators [the RSI (14)] to confirm long term trends.

I can't give my scans away because I am still working on them and trying to get them more accurate, but I can tell you that I look at short-term indicators going up (short term MACD or PPO) as the price is going down. Usually these stocks go up the next day.
I think I am one of the few people that use this little "trick."
Obviously my scan is a little more complicated than that, but that is the basics.

Also, I look for stocks trading above their 200EMA.

I can tell you that the lower the RSI (2), the great the chance is that the stock will head back up. And the higher the RSI (2), say at 99.88, the more likely it will pullback the next day.

Two other things I look at are news and expectations. Like my SOLF pick, energy stocks are/are going to be the new thing to look for. Picks like fancy restaurants and casinos are going to get killed in the market.

If people are struggling to make house payments, they are not going to pay the extra money airlines are charging, the hotel fee, and then go gamble the money that they don't have much of in the first place.

Right now I am definitely looking at energy stocks and similar stocks.

Also, I use IHUB to see what stocks are popular, but most of the time I don't like buying into the top IHUB stocks because most of the time they have just started getting a lot of volume. If you get in at the start of an IHUB hyped stock, then you can make a lot of money, but most of the time they go in phases such as: News, Pump, Sell off by original holders, Dumb money enters the hype and then become bag holders. Of course this is just my opinion and not all the most discussed stocks are like this.





If you know of any solar/energy stocks, let me know and I will post them on my blog.
Posted by admin on Saturday, May 24, 2008, at 10:19 am, and filed under RSI (2) indicators, SOLF, brian's penny stock, energy stock picks, energy stocks, penny stock, penny stock blogs, stock scans. Follow any responses to this post with its comments RSS feed. Comments are closed, but you can trackback from your blog.