How To Pick Stocks

When looking for the top stocks for short-term trading and the stock market game, students typically seek certain characteristics that indicate strong upward price momentum. Remember, we are not talking about long-term investing here. This is short-term trading.

Here are some key characteristics of top stocks to consider:

Price Going Up

Look for stocks that have been consistently moving up in price over a relatively short period, such as several weeks or months. Stocks with a strong upward price trend are more likely to continue rising in the near term.

Lots of People Buying

Pay attention to trading volume, which refers to the number of shares being traded. Stocks with high trading volume indicate strong investor interest. High volume confirms the validity of the price movement.

Stronger Than Others

Evaluate the relative strength of a stock compared to the broader market or its sector peers. Stocks that are outperforming the market or their industry peers are often favored by momentum traders, as they have demonstrated resilience and strength.

Moves Up and Down

Consider the level of volatility in the stock’s price movements. While excessive volatility can be risky, moderate volatility is often preferred because it provides opportunities for quick gains as prices fluctuate.

Good News

Look for stocks with positive news events that could propel prices higher. This could include strong earnings reports, positive product announcements, favorable regulatory developments, or other significant news that could attract investor attention.

Watching Charts

Utilize technical analysis tools and indicators, such as chart patterns, to identify stocks with strong momentum.

Strong Company

Stocks with solid fundamentals, such as strong revenue growth, earnings growth, and a competitive market position, may have more sustainable momentum.

These are some things we can look for when we want to find stocks that might go up quickly. But remember, high reward only comes with high risk. Picking stocks for the stock market game is dramatically different than investing your hard earned money to achieve long-term financial goals.

Top Stocks

Quote of the week

“I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.”

~ Warren Buffett

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