Should you focus on beaten down stocks

Where do trends start from is a question worth considering from various angles.Once a low point in downtrend is established a new trend starts .If you want to find a trend very early then you need to start with stocks in downtrend. Once they stop going down and established a low , a new trend can start.If you see last few years you will see bulk of big explosive moves have happened from most beaten down stocks. You can find several hundred examples like NFLXThey go down and in many cases spend very little time near low and then explode many folds.In most rallies it is the beaten down stocks that have lead the up move.If you are focusing on stocks near 52 week high …

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Where do trends start from is a question worth considering from various angles.

Once a low point in downtrend is established a new trend starts .

If you want to find a trend very early then you need to start with stocks in downtrend. Once they stop going down and established a low , a new trend can start.

If you see last few years you will see bulk of big explosive moves have happened from most beaten down stocks. You can find several hundred examples like NFLX

They go down and in many cases spend very little time near low and then explode many folds.

In most rallies it is the beaten down stocks that have lead the up move.

If you are focusing on stocks near 52 week high or with established momentum , you would often find they are not the leaders that lead advances

Not every beaten down stock is going to start an explosive move once low is established but some would.

If you can find a way to identify those stocks when they are in downtrend then you have an edge.

How can you find stocks likely to explode up after establishing a bottom?

Think about this and research this and if you can come up with logical and structured way to do it you have found a good setup and mountain sized edge.

The problem is many stocks will be in downtrend , not all are going to reverse and establish big trends, so vehicle selection or selecting right stock is the key.

If you can really take this concept to heart and spend some quality time thinking through this, you will have developed significant structural edge.

Recent start of an uptrend in many gold stocks shows the same thing

One of the ways to find explosive moves is to focus on most beaten down stocks. It is not the only way, but for position traders it is one of the best way to enter new up leg early.


there are many points around a trend move where setups can be developed. There are lot of traders who focus on setup near 52 week high once trend is established. That is well documented setup idea.


But if you can identify trends early , you can find earlier entries. For position traders it can give you lot of time to research an idea.

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Stocks trend from time to time

CSIQ had a big trend move in last 13 or so month. Obviously if you can catch a move like that you can have big returns.These kinds of trends have fascinated speculators for hundreds of years and methods have evolved to try and capture these kind of moves.Trend following is something you will come across as one of the legit method of position trading. For some it is almost like religion.As a speculator if you look at both good and bad side of trend following then you are in a better position to make informed decision.The nature of moves in individual stocks consists of long duration trends from time to time. Trending period is a period where the stock drifts up or down for …

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CSIQ had a big trend move in last 13 or so month. Obviously if you can catch a move like that you can have big returns.

These kinds of trends have fascinated speculators for hundreds of years and methods have evolved to try and capture these kind of moves.

Trend following is something you will come across as one of the legit method of position trading. For some it is almost like religion.

As a speculator if you look at both good and bad side of trend following then you are in a better position to make informed decision.

The nature of moves in individual stocks consists of long duration trends from time to time. Trending period is a period where the stock drifts up or down for a given time frame. During trend periods stock make series of high for that trend duration.

Not every stock trends like CSIQ during a year.A stock may not trend for years. When you see a long duration trend it looks so simple. But you have to understand you are looking at a trend after the fact.

At the start of every trend move you have no way of knowing how long it will last in period terms . You do not also know how much % move it will make. Unless there is some other superimposition you make like say valuation or growth or future potential predicting trend length in a stock is difficult but not impossible.

In an index based on past trends you know approximate behavior of trends but still every trend move in market is different as most of us found out in last 14 months where market went up without a 5% correction.

As a speculator we are interested in trends not from theory perspective but from the money making perspective.

As a trader I am agnostic to a style as long as it can make me money with least amount of drawdown.

Now let us look at CSIQ again to better understand trends:

How did this trend start?

How did this trend resume?

How did the third leg develop?

How does this trend look using TI 65

How does it look using Double Trouble

Here are the questions for today to mull over

How long in days is this trend ?

How much in % term is this trend?

How many up days in the trend?

How many down days in the trend?

How many 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 15% 20% days in trend

How did the trend start?

www.stockbee.biz If you are serious about your trading and want to build an enduring edge the Stockbee Member site might be for you. One of the most recommended site for learning to trade. 2200 members and growing everyday… www.stockbee.biz

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Utilities Sector Benefits as Market Turns Defensive

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The Sector Carpet is mostly red on Monday, but pockets of green can be seen within the utilities sector as money moves into this defensive area of the market. Pepco Holdings (POM) is leading the group with a 1.5% gain. DTE Energy (DTE) and Ameren (AEE) are also showing relative strength with gains. Chartists can double click on a box to focus on a particular sector.

Click this image for a live MarketCarpet

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Utilities Sector Benefits as Market Turns Defensive

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