Thursday, May 13, 2010

Stocks on my long watchlist and why they are there...

The table below shows the four stocks in my watchlist. Each column contains a criteria that usually must be satisfied before a stock can be added to my long watchlist. The row highlighted in red shows the minimum requirements for each criteria before a stock can cross the hurdle and enter my watchlist.

My approach has been initially derived from CANSLIM but modified by ideas that I have found on the excellent site: The first step in my process is to identify stocks that announced blow out earnings with sales/earnings growth for the quarter greater than 25%/40% compared to the prior year's quarter and the market reacting by bidding up shares in the company by greater than 8% from the previous close on volume greater than triple the average volume of the past 50 days.

The table shows the other critera that I look for.

After having identified stocks with a high probability of out performing the over all markets during an uptrend; I then wait for the markets to start coming off a correction and I enter the stocks that have held up the best during the recent correction on full margin.

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