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19 views

ICT

Shush

Uploaded by

stealthtec57
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as TXT, PDF, TXT or read online on Scribd
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Stock Trading - Using Options

Valuation Stock Selections

Investor's Business Daily has absolutely one of the best resources for a Trader.

Index Stocks has 630 stocks at your disposal however we are going to be talking
about valuation in the basis on Growth Stocks, this is where the big astronomical
surges occur or take place, and it is going to be in this valuation format. We are
going to be utilizing this method called CANSLIM, CANSLI is where I get my
fundamental level whether I am being Bullish or Bearish, and finally the last one
here is in a technical basis "M".

C: Current Earnings
Look for stocks with earnings growth of at least 25%
in their latest reported quarter. Bigger growth is even better. You would also like
to see earnings acceleration over the last three quarters. For example, one quarter
earnings may be up 25%, the next quarter up 50%, and the most recent up 90%.

A: Annual Earnings
You want to see annual earnings growth of at least 25% for each of the last 3
years. We have also
found that the greatest stocks of all time had the
best margins in their industry group and return on equity of at least 17%.

N: The New Factor


The biggest CAN SLIM winners had something
NEW! New products, new services, new leadership, new price high or a new condition
in the industry. Another important factor is to look for newer
companies. Our studies of the greatest stock
market winners showed that 75% of them went public within the last 8 years.

S: Supply and Demand


One of the most basic economic principles is the law of supply and demand which is
most sharply demonstrated in the stock market. Strong demand for a limited supply
of available shares will push a stock price up. On the flip side, an oversupply of
shares and weak demand will cause the price to sag. (We will be looking for a stock
that obviously is well valued, it has to be above 20 dollars a share and it has to
have a reasonable float that means the outstanding number of shares that can be
purchased. But you want to be looking at to be buying a stock that has a ton of
float or open shares that can be purchased. Compare that with a stock that has the
same conditions however with lesser shares which one has more opportunity to go
higher? Well, if Smart Money is going to be buying the one with the lesser shares
that is the one that is going to go up a lot more because it is going to be really
easy for them to reprice because of the Supply and Demand factor seen by investors
pouring money into it).

L: Leader vs. Laggard


True leaders are those companies showing the best
earnings growth, strongest sales, superior price
performance and are in LEADING industry groups.
Consider buying high, and selling higher. The
results from our study of the greatest market
‘winners revealed something quite interesting in
effect, the ‘strong got stronger’. The task for astute
Investors into locate these strong, leading
‘Companies and avoid the weak, laggard performers.

I: Institutional Sponsorship
Mutual funds, pension funds, and bank are the big
players that drive the market. They account for as
much as 80% of all trading activity. For a stock to
be a top performer, it must have institutional
support to fuel its price moves. We suggest that
you only buy stocks that have at least 10 Mutual
Funds that own it and ideally, have 2-3 quarters of
increasing institutional sponsorship. (We can get this information in the internet
by digging in and finding it or you can save time by utilizing the IBA Ranking List
provided by Investor's Business Daily. Also, look for SMT Divergence).

M: Market Direction
Our study shows 3 out of 4 stocks follow the
market's trend, so you always want to trade in sync
with the market, you should only be buying stocks in a confirmed uptrend and
protect your capital in a
correction. (When you have all of these conditions aligned, the only thing
remaining is utilizing the Dow theory and knowing when the Stock market is going to
move up as a whole).

Major Market Timing Points


Seasonal Influences Per Calendar Month:
January - Bearish
February - Bullish
March - Consolidation
April - Bullish
May - Bearish
June - Consolidation Ending Bearish
July - Bullish Into Mid-Year High
August-Consolidation
September - 1st half Bullish - 2nd Half Bearish
October - Bullish
November - Bullish
December - Bullish

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