stock picking on Wall Street

Picking Stocks

8000 U.S. Stocks

There are far too many stocks in the U.S. to pick stocks individually. Filter this large amount so that stock picks can be investigated one at a time. A manageable group of stock picks can be obtained by a variety of methods.

Stock Market Sectors

One of the best ways to cull stocks into a reasonable bundle is through sector analysis. Find the sectors that are moving up faster than the market when it is bullish or the worst sectors when it is bearish. Then pick stocks within those sectors that are out performing (i.e., either up or down) the overall market. This will lead you to much higher profits.

Following the Stock Market Trend

A vast majority of stocks follow the trend of the overall market. If the market is trending up, picking stocks that are likely to move down is unlikely to be successful. If the market is sinking, stock picking bullish stocks will probably fail. Read our Trading Tutorial for information about "Discerning Market Strength and Weakness".

Pick Stocks That Are Likely To Move Quickly

There are a variety of stock picking patterns that suggest that a stock is about to move quickly. For example, picking stocks that have recently experienced huge volume and then later had very low volume in a similar price range are likely to switch gears and move quickly. This is because market professionals accumulated shares during the big-volume day but the professionals were not present during the low-volume day. This suggests that their accumulation is finished. Once the big players have placed their bets, those stock picks are likely to move the way the professionals desire.

Here's an example of this method:

stock picking example


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