As covered in recent webinars over the past week, we have seen some constructive price action from indexes. Now is the time to look for stocks to confirm an Attempted Rally before initiating positions. The follow-through day and price action can open the gate for us, but we still have to identify leaders to buy.

In the CANSLIM system, we buy stocks breaking out of classic base patterns that have  statistically led to gains in financial markets, a study that covers stocks over the past 100+ years. We also look for above-average volume on the breakout as confirmation of accumulation from the larger institutions.

Former leaders rarely lead the next cycle. In our system, we like to see new names with growing earnings, sales, and relative strength. Once identified, we want to gradually wade into the market,  not plunge into a position recklessly. 

 Now is the time to review your buy rules, and if this rally is real, opportunities will present themselves in the charts and allow us to get involved.

If you have missed any our recent webinars on the current market, you can watch them here in our archive. If you have any questions, feel free to contact us at 800-424-9033 or at reachus@marketsmith.com.

 

Best returns,

 

George Orlando, MarketSmith Team