Of course, I like to follow William O'Neil's CAN SLIM method for picking stocks as he likes to pick great growth stocks.
You can use any stock or industry you like with my system, but if you want a top-performing stock and the best chance of the stock going up you can screen for it.
Personally, I like to use MSN Money's screener. Only change the boxes that I refer and leave the rest the way they are.
1. First of all, we need to pick an industry that is currently hot. If you do not know any or do not want to do the research, just select "all industries".
To pick a 'hot' industry. Log in to www.prophet.net. At the top bar, click on 'EXPLORE' and select the sub category 'industry ranking'. Pick only the top 1-20 industries I recommend a 1 year time frame.,
2. The market capitalization can be 'small', 'medium', or 'large' which depends on what the market is favoring at the moment. I prefer to use 'small' to 'medium' but this also increases volatility.
3. 'Net Profit Margin' selected 'as high as possible'
4. '12 month relative strength' should be 'as high as possible'
5. 'Debt to Equity Ratio' should be 'as low as possible'
6. 'Revenue Growth Year vs. Year' should be 'as high as possible'
7. Optional: 'Average Daily Volume' over last 2 weeks should be 'as high as possible'
Any of the other features that I did not mention should NOT be used. You will now have a list of potential candidates to watch more closely and possibly trade.
Pick a stock that have 25% or more in the growth column and over 80 in the relative strength column.
This is the best step-by-step way so far I discover of choosing which stock to buy by using the available FREE tool in the Internet easily.
By: John Yap