Dive into three top-performing stocks from leading industries, each poised for success. Save time and watch your investments soar—unlock these opportunities now!
market conditions
Given that the overall market uptrend is under pressure, we need to approach our positions with increased caution. This means limiting our risk exposure to 3-5% per trade and not allocating more than 5% of our account’s value to any single position. Though these limits may seem small, experience teaches us that minimizing risk during uncertain times leads to smaller losses.
This doesn’t necessarily mean that we should back off. Let’s just try here and there and if the investments pay off, we could increase our positions.
1. googl
GOOGL isn’t just a company; it’s a behemoth in its industry, currently sitting pretty in a consolidation phase that whispers opportunity. Here’s why I’m all eyes on GOOGL:
- Next EPS Date: April 23
- Industry Rank: 31/197
- Stage: 2
- Base Type: Consolidation
- Base Depth, %: 15
- Pros:
- Right in the buyzone.
- Earnings acceleration in recent quarters.
- A robust 27% ROE.
- Cons:
- Underwhelming sales growth.
- RS line could use some pep.
- Upcoming earnings might stir the pot with volatility.
And why does this matter to you? Because knowing when to hop on—or off—a stock is crucial, and GOOGL’s position gives us just enough predictability mixed with a dash of excitement. Wondering how to act on this information? I’ll tell you just how to strategize your move at the end.
2. APG: Quietly Climbing the Ranks
APG might not make the headlines every day, but that’s exactly where the hidden gems are. Consider these details:
- Next EPS Date: May 2
- Industry Rank: 22/197
- Stage: 3
- Base Type: Flat Base
- Base Depth, %: 13
- Pros:
- RS line showing a steady uptrend.
- Strong market accumulation.
- High RS rating of 93, outperforming most of the market.
- Solid 20% ROE.
- Cons:
- Sluggish 3% sales growth.
- Earnings date looming without a solid profit cushion.
Now, why should this catch your eye? APG’s resilience and quiet accumulation signal a stock that’s poised for a breakout. Not in the buyzone yet, but why not keep it on your radar? I’ll explore when might be the best time to jump on this opportunity.
3. CNM: The Dark Horse
Last but certainly not least, let’s talk about CNM, a stock that’s hard to ignore with its compelling story of growth and potential.
- Next EPS Date: NA
- Industry Rank: 5/197
- Stage: 2
- Base Type: Cup with Handle
- Base Depth, %: 17
- Pros:
- Heavily accumulated by market and institutions.
- No imminent earnings to unsettle the waters.
- Impressive 23% ROE.
- Dominates with a 97% RS rating.
- Cons:
- Price nearly doubled since the last base—could be extended.
- Doesn’t quite meet all CAN SLIM criteria.
And what makes CNM a dark horse? Its stealthy ascent is backed by solid fundamentals and less immediate risk from earnings volatility. Is it time to consider adding CNM to your portfolio? Let’s dig into how we can approach this intriguing option.
GENERAL REQUIREMENTS
Choosing the right stocks isn’t a game of chance; it’s a deliberate strategy. This time, with a plethora of options at my fingertips, I could afford to be pickier. So, what were the non-negotiables?
First off, industry leadership was paramount. I zeroed in on stocks from the top echelons—specifically, the TOP 10 out of 197 industries. Why? Because these represent the crème de la crème, the TOP 5% leading the charge. It’s not just about being good; it’s about being outstanding.
Next, the foundation matters. I looked for stocks with base depths signaling strength without overextension—ideally, between 10-20%, stretching up to 35% for those in a cup pattern. It’s a balance between stability and potential, ensuring our picks have solid ground beneath them.
Moreover, the up/down ratio needed to be above 1.0, a clear indicator of upward momentum. Similarly, the trend in institutional ownership couldn’t just be stable; it had to be climbing. These are the signs that savvy investors are not just watching but actively betting on these stocks.
The RS line and rating were the final seals of approval. An uptrend in the RS line and a rating of at least 85 out of 100 ensures we’re backing winners, not just participants.
By setting these stringent criteria, we’re not casting a wide net; we’re spearfishing for the best. In a sea of choices, we’re not looking for just any fish; we’re after the prize catches that promise not just to survive but to thrive.
details at a glance
GOOGL
- Next EPS Date: 23 Apr
- Industry Rank: 31/197
- Stage: 2
- Base Type: Consolidation
- Base Depth, %: 15
- Up/Down Ratio: 1.5
- EPS Trend: Up
- RS Rating: 85
- RS Trend: Neutral
- Institutional Ownership Trend: Neutral
- Pros:
- Currently in the buyzone.
- Earnings have shown acceleration in recent quarters.
- Robust ROE at 27%, indicating strong health.
- Cons:
- Sales growth is underwhelming.
- RS line could be better positioned in an uptrend.
- Impending earnings may introduce price volatility.
- Industry rank at 31; optimal would be top 10 or 20.
- Comments: Advisable to buy a modest share now with a tight stop-loss due to potential volatility.
- Further Comments: Aligns closely with CAN SLIM criteria, currently in the buyzone.
- Maximum position size of a portfolio, %: 5
- Maximum Favorable buying price: $160.76
- Stop-loss: $152.72
- Position risk, %: 5
APG
- Next EPS Date: 2 May
- Industry Rank: 22/197
- Stage: 3
- Base Type: Flat Base
- Base Depth, %: 13
- Up/Down Ratio: 1.6
- EPS Trend: Up
- RS Rating: 93
- RS Trend: Up
- Institutional Ownership Trend: Neutral
- Pros:
- Steady RS line uptrend.
- Strong market and institutional accumulation.
- High RS rating, outperforming 93% of the market.
- Solid ROE of 20%.
- Cons:
- Sluggish sales growth at 3%.
- Earnings date approaching; limited profit cushion.
- Not currently in the buyzone.
- Comments: Buying near the EMA-21 line might be reasonable, setting a stop-loss 3% below.
- Further Comments: Almost meets CAN SLIM criteria; timing is second best.
- Maximum position size of a portfolio, %: 5
- Maximum Favorable buying price: $39.18
- Stop-loss: $37.98
- Position risk, %: 3.06
CNM
- Next EPS Date: NA
- Industry Rank: 5/197
- Stage: 2
- Base Type: Cup with handle
- Base Depth, %: 17
- Up/Down Ratio: 2.2
- EPS Trend: Neutral
- RS Rating: 97
- RS Trend: Up
- Institutional Ownership Trend: Up
- Pros:
- Significant market and institutional accumulation.
- No immediate earnings release, reducing immediate risk.
- High ROE of 23% exceeds the minimum requirement.
- Outperforms 97% of the market.
- Cons:
- Price might be extended, having nearly doubled since the last base.
- Sales and earnings growth do not meet CAN SLIM criteria.
- Comments: A small position near the EMA-21 line could be wise, with a slight stop-loss below.
- Further Comments: Strong overall, despite not fitting CAN SLIM fully; considered a safe investment in its leading market.
- Maximum position size of a portfolio, %: 5
- Maximum Favorable buying price: $57.05
- Stop-loss: $55.34
- Position risk, %: 3.00
TERMS AND DEFINITIONS
EMA 21 Calculates the 21-period exponential moving average, highlighting short-term trends.
SMA 50 Averages the price over 50 periods, showing medium-term trends without overemphasizing recent data.
SMA 200 Averages the price over 200 periods, revealing long-term trends by treating all data equally.
Industry Rank Investor’s Business Daily’s system that ranks industries 1 to 197 based on performance. It guides us in CAN SLIM TRADING towards leading sectors.
U/D Ratio Measures stocks closing up versus down. A ratio above 1.0 indicates bullish sentiment, important in CAN SLIM TRADING.
RS Rating Ranks a stock’s performance on a 1 to 99 scale. I look for at least 85, showing strong momentum and growth potential.
RS Line Compares stock price to the market, plotted as a ratio. We seek an uptrend, indicating outperformance and strong momentum.
Volatility Measures how much a security’s price fluctuates over time. High volatility means large price changes, indicating risk and potential reward.
Institutional Ownership Trend indicates whether the stock is under accumulation or distribution by the institutions.
EPS (Earnings Per Share): A financial metric calculated by dividing a company’s net profit by the number of its outstanding shares. It indicates the amount of profit attributed to each share of stock, serving as a key indicator of a company’s profitability.
STAGE 1: BASING OR BOTTOMING STAGE
Definition: A period following a stock’s decline where it starts moving sideways, forming a base. This stage signifies the easing of downward pressure and the beginning of stabilization, indicating that the stock is not in an uptrend yet but is preparing for potential future growth.
STAGE 2: ADVANCING OR UPTREND STAGE
Definition: The phase in which a stock breaks out of its base on significant volume, indicating a strong buying interest and the initiation of a new uptrend. This stage is considered the most opportune time for investors to purchase the stock, as it is expected to achieve substantial gains.
STAGE 3: TOP OR PEAKING STAGE
Definition: A stage characterized by the stock beginning to exhibit signs of losing momentum after its upward movement. The stock may start to move sideways with increased volatility compared to Stage 1. This suggests the stock might be reaching its peak, and the existing uptrend could be weakening.
STAGE 4: DECLINING OR DOWNTREND STAGE
Definition: This final stage occurs when the stock breaks down from its Stage 3 pattern and enters into a downtrend, marked by a sequence of lower lows and lower highs. It signifies that selling pressure has surpassed buying interest, usually serving as a signal for investors to sell the stock to mitigate further losses.
Wrapping It Up: Making Your Move
Now that we’ve toured through my top picks for the week, you might be wondering how to translate this into action. Here’s the game plan:
- GOOGL: Given its current stability and potential for growth, consider a small position now, setting a tight stop-loss to manage risk.
- APG: Keep a watchful eye and be ready to act as it approaches the buyzone.
- CNM: If you’re feeling adventurous and looking for a solid yet potentially undervalued stock, CNM might just be your ticket.
Remember, the stock market is a dynamic beast—always shifting, always evolving. Staying informed and ready to adapt is your best strategy for success. Are these stocks the right fit for your adventurous spirit? Only one way to find out—dive in!
