Studying Leaders of the Past to Find Leaders of Tomorrow

Change Date Feature

Students of the market

Chapter 1 of “How to Make Money in Stocks” by William O’Neil features charts of some of the best moves in the history of the stock market. The book starts with these examples because Mr. O’Neil is making a point that is central to his stock investing methodology: History repeats itself. We study prior leaders to look for current leaders with similar characteristics.

During a correction, you may not be looking for stocks to buy, but it is a great opportunity to study new potential stock ideas. For MarketSmith subscribers, this type of research is easily done by using the “Change Date” feature.

The MarketSmith Time Machine

Click the change date arrow, next to the date field in MarketSmith’s top navigation (as shown in the screenshot), and calendars will appear, from which you can select a date to view a chart. Any dates highlighted with a green circle are earnings report dates. You can also manually enter a date yourself in the date field. Once you have selected the date, use the left and right arrows to move forward and backward in time.

Your investment roadmap

Here at MarketSmith, we try to find precedents for stocks we may currently have on our watch lists to create a guide for judging what constitutes normal and abnormal action. Try to look for similarities in price and volume action. Other behavior to look for includes reaction to earnings and bounces off key moving averages. To learn more about studying historical precedents in MarketSmith, please watch our archived webinar from 4/29/2014 “Discovering Future Winners Through Historical Precedent,” with Scott Lehtonen.

 

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