In 1994, I started working with the CAN SLIM method of trading stocks hot penny stocks. This process was developed by William J. O’Neil, the founder of Investors Business enterprise Everyday. O’Neil made use of the most beneficial performing stocks in history, as a blueprint for the technique. The method requires implementation of each technical and fundamental analysis.
The objective will be to locate top stocks of young, innovative firms, before they make significant price advances. This can be achieved by only shopping for the really finest stocks in the suitable time. The approach also implements solid money management. No technique can have stock market good results inside the long run, with out keeping losses modest.
In 1997, I was watching a young, innovative firm named Yahoo, symbol YHOO. It went public in 1996, and was a leader inside the new world-wide-web group of stocks. The fundamentals which include earnings per share and sales had been exceptional. I knew I was watching a possible massive winner, and my odds of stock market place success were very substantial.
At this time, the general was within a confirmed uptrend, and Yahoo showed superior technical action. The stock discovered assistance at its 50-day moving typical several instances. Then, in July, 1997, Yahoo broke by means of a key resistance location on very heavy volume. This really is when I bought Yahoo at $27.00 per share.
The stock continued to show outstanding technical action, because it moved up in value. Whenever there was a downward price reaction, it was in low volume. This price and volume action told me the large institutions, such as mutual funds, pension funds and bank funds, had been not obtaining out of your stock. This can be quite bullish, considering the fact that massive institutions represent about 75% of all trading activity inside the stock market place.
In late October, 1997, Yahoo did break through its 50-day moving average in heavy volume. This was my signal to acquire out on the stock. The large institutions had been starting to sell. This key clue told me a major cost decline was probably within the creating. I sold all my shares, and produced nearly 100% profit in about 3 months. I followed historically verified, obtaining and promoting rules. This can be how to attain stock marketplace success.