Picking the Right Stocks Using Charts
by Michael Kahn
Investors are always searching for ways to “beat the market,” and while naysayers abound, studies have shown that individuals can indeed produce superior returns in their portfolios. The best part is that it does not take advanced degrees and high-powered computers to do it.
If half the battle in the stock market is recognizing whether a bull or bear market is in place, then the other half is choosing the right sectors and the right stocks. This is the basis for relative strength or relative performance investing. Find the sectors and stocks that are outperforming the market, ride them until they stop outperforming and then find the next leading area. Indeed, relative performance is represented by not one but two letters in William O’Neil’s CAN SLIM stock selection methodology. “L” stands for leader or laggard versus other stocks, and “M” stands
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