No. of Recommendations: 12
From Justin Mamis,

Today's technicals are tomorrow's fundamentals.

Don't try to defy selling pressure in a weak stock.

Play the devil's advocate to headlines.

It is useful information if you are wrong.

Place stop-loss orders at the price that would indicate the stock is failing.

Why not buy more of a stock that has already proven itself strong, on a pullback to support, for example, rather than search for another stock that hasn't proven itself yet? There is nothing wrong with owning more of a winner. It is only those who dollar average down that are betting on losers; dollar averaging up is a path to success

Let others fish for bottoms

Don't look for low-priced issues as if they have some special virtue. They don't.

Bottom testing is bullish because it helps to form a base

H&S's patterns are the essence of bottom testing. When the right shoulder forms, it shows that the bulls are winning the test.

Triangles, however, are uncertainty patterns. If the stock trades in the upper end of the triangle, it is more likely to break out on the upside; if it trades in the lower range, it is more likely to spill downward. A move within a triangle that only goes part of the way toward the opposing trend line is usually signaling that it wants to turn around and break the trend line that it has most recently bounced off of. Make triangles prove themselves; you'll still be in early in a real move.

Lack of a base means you are guessing at a bottom. What's the hurry?

Buying laggards no longer works. It is as dangerous as buying low-priced speculative stocks simply because they are low priced.

Don't buy a hitherto strong stock if its new high is made on less volume. Volume peaks halfway into the move. The lower volume is a warning that you are late.

Be patient.

Avoiding buying at the wrong time is more important than trying to be right. Don't think you have found the one stock that should go up regardless; it may, but if it doesn't, chances are you'll be stubborn about it and hang on, and the loss will be that much greater.

The problem of buying is not acting emotionally but nevertheless acting in time.

Follow big volume on breakouts and low volume on dips.

But remember that volume is low during bull-market dips. During a bear market, low volume is dangerous, suggesting that the big-volume part of the decline still lies ahead. A stock (or the market) that starts to break down on low volume should never be excused. Low volume is bullish only when the stock is holding at the top of support.

Develop a betting style that works for you-buying after a base forms but in anticipation of the breakout, or on the breakout, or on the pullback- and then be consistent.

Never react to good news.

Try to be long the strongest stocks and short the weakest simultaneously.

When a stock goes against you, it is always possible to find a reason to justify the decline, to sit complacently with the thought that it will go up again. But when a stock goes up, it becomes a threat, a challenge. Keep what is doing well, and sell what isn't, not the other way around.

Let the market tell you. Don't try to tell the market. Why should the market cooperate with your needs?

Mamis- When to Buy

nic
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