CRH
- Next EPS Date: 3 May
- Industry Rank: 8/197
- Stage: 1
- Base Type: Consolidation
- Base Depth: 15%
- Up/Down Ratio: 1.8
- EPS Trend: Neutral
- RS Rating: 93
- RS Trend: Up
- Institutional Ownership Trend: Up
- Pros: Very strong industry. Stock under strong accumulation by the market.
- Cons: Earnings are flat and should grow more rapidly. Price broke out of the base a long time ago, which adds to the risk.
- Comments: At the time of this writing, it’s fairly safe to buy the stock and place a stop-loss slightly below the EMA-21 line. This would be a fairly reasonable risk.
AXP
- Next EPS Date: 19 April
- Industry Rank: 10/197
- Stage: 1
- Base Type: Cup with handle
- Base Depth: 21%
- Up/Down Ratio: 1.9
- EPS Trend: Neutral
- RS Rating: 89
- RS Trend: Up
- Institutional Ownership Trend: Up
- Pros: Stock under strong accumulation by the market. Very strong industry. The latest base pattern was low, which is a good sign that there are not many who want to sell the stock.
- Cons: Earnings are coming up, which could add some price volatility. Earnings growth and sales growth should be higher.
- Comments: The price of the stock is trending up. It seems favorable to buy above the EMA-21 line and place a stop-loss slightly below it. The price is in a slow and steady uptrend.
SQ
- Next EPS Date: 2 May
- Industry Rank: 10/197
- Stage: 1
- Base Type: Cup
- Base Depth: 23%
- Up/Down Ratio: 2
- EPS Trend: Up
- RS Rating: 89
- RS Trend: Neutral
- Institutional Ownership Trend: Up
- Pros: The price of the stock is essentially in the buy zone, making it a safer buy. Cup pattern is only 23% deep, indicating strong price action. Price broke out of the base with strong volume. Earnings and sales are growing. The stock is under strong accumulation by the market.
- Cons: RS line should be in a stronger uptrend.
- Comments: It would be reasonable to buy the stock and place the stop-loss approximately 7.5% below the purchasing price.
AZEK
- Next EPS Date: 7 May
- Industry Rank: 6/197
- Stage: 1
- Base Type: Flat base
- Base Depth: 9%
- Up/Down Ratio: 1.7
- EPS Trend: Up
- RS Rating: 95
- RS Trend: Up
- Institutional Ownership Trend: Up
- Pros: Price action is strong with low volatility. Stock is under strong accumulation by the market. Earnings and sales are growing rapidly. Stock outperforms 95% of the stocks in the market.
- Cons: (Not specified)
- Comments: The stock is not in the buy zone at the time of this writing, but it seems safe to buy it right now and place a stop-loss below the EMA-21 line, which has acted as a support line.
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.
Conclusion
In conclusion, as we navigate through the intricate dance of the stock market, armed with a blend of technical analysis, market trends, and a meticulously curated list of stocks, we embark on a journey that highlights the principles underpinning successful investments. Firstly, the stocks highlighted in this discourse—each chosen based on stringent criteria—represent not merely opportunities but profound lessons in the nuanced art and science of investing.
Moreover, our exploration through the stages of stock development, from the promising potential of basing stages to the cautious optimism heralded by uptrends, underscores the inherently dynamic nature of the market. It’s a realm where, importantly, vigilance, informed decision-making, and strategic timing converge, thus creating ripe opportunities for growth and financial advancement.
Furthermore, in reflecting on the insights shared, remember that the journey through the stock market is as much about the paths we choose as it is about the wisdom we gather along the way. Therefore, let the knowledge imparted here serve not only as a guide for today’s investment decisions but also as a foundation for tomorrow’s financial strategies. Ultimately, as we move forward, let us do so with the confidence that comes from being well-informed, ready to embrace the opportunities, and navigate the challenges that lie ahead in the ever-evolving landscape of the stock market.