February 8, 2007
Ford Stock Quote
Online Trading Education >> STOCK MARKET TIPS … Trading Technology Stocks .- BY http://www.ProfitableStockMarket.com
The stock market can present you with a lot of hot stocks every day. Many of them are new technology stocks that come from the nanotech, biotech, voip, healthcare, homeland defense or internet sectors.
Most of them may seem promising, but the truth is that a good number of these trading & investing opportunities are extremely risky, while others are not as good as they seem. That’s why it’s very important to know how to choose the best especially if you want to day trade them.
When you know how to pick and approach the best hot stock trading opportuntites, you are able to generate a consistent and respectable amount of money in a very short period of time.
Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market.
You don’t necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.
If you want to learn how to trade and pick hot momentum stocks in a simple yet effective way every week, just log on to http://www.ProfitableStockMarket.com right now and discover what youve been missing.
Take a Look at The Valuable Strategies and Bonuses that You can access today:
+ $ Trading Psychology. Realistic mindset of experienced momentum traders. The ones who make more money look at every opportunity in certain ways.
+ $ Short Selling Opportunities. Focus on these strategic scenarios and short stocks like a pro over and over without getting confused. The other side of the golden coin: Shorting to profit when the stock goes down.
+ $ How to pick momentum stocks every day in an easy and fast way. Pure gold over and over.
+ $ What kind of stocks to look for and how to classify the opportunities for greater trading profits. Come and get a truckload of $$$$$ from now on.
+ $ Profitable momentum trading without technical analysis.
+ $ What kind of stocks and “opportunities” to avoid and why. Save thousands in losses from trades gone bad in the future.
+ $ The “little details” you should look for before you consider a momentum daytrade.
+ $ Things to consider when trading low float momentum stocks
+ $ Buying micro cap and small cap stocks with momentum.
+ $ Trading NASDAQ stocks or OTCBB - OTC stocks ?
+ $ Getting ready for the trading breakout. Position your self for success.
+ $ Will my market rally last more than 5 minutes or less? What to do
+ $ It’s all about the stock rally. The rest is just a bunch of elegant B.S. Learn to focus on what matters.
+ $ How to lock in profits on the way up
+ $ Should I hold overnight trading positions for a possible gap up ?
+ $ What to do if the stock rally stops moving. Cash in your pocket !
+ $ Level 2 trading ( L 2 ) strategies for momentum stocks.
+ $ Time frames for trading stocks with momentum, Pros and Cons
+ $ Premarket stock trading strategies and tips.
+ $ Trading momentum stock opportunities during market hours. $$$$
+ $ Trading at the open or waiting till the dust settles to make your move. It depends. This can make a big difference in your results.
+ $ Stocktrading during lunch hour ?
+ $ After hours trading tactics and tips. Super value, yours included !
+ $ Become an expert of your hotstock watch list.
+ $ You don’t need to watch the stock market all day. Profitable stock traders have a better way.
+ $ Stock trading is not a job. Save money and don’t make it another rat race.
+ $ Watching charts and stocktrading all day ? Overtrading is not the way to go. Learn why !
+ $ Testing the high probability trading plan
+ $ Stress free day trading tips and strategies for beginners and experienced stock traders. Your time is here!
+ $ Real examples of recent on-line trading opportunities. Learn in a practical way.
+ $ Powerful stock market resources and tools for day trading with our strategy. Discover momentum stocks in a snap and choose only the best every day. No waisting time. Its all about results !
Just picture your self waking up EVERY morning fresh and confident knowing you can identify, validate and take advantage of great momentum trading opportunities that are capable of generating you very profitable results.
For more information visit us today at Profitable Stock Market http://www.ProfitableStockMarket.com
About the Author
Profitable Stock Market helps day traders and investors pick hot stock trading opportunities every day at http://www.ProfitableStockMarket.com
In a previous article, we discussed Ben Graham’s Net Current Asset Value
(NCAV) strategy and how it works. Here we will revisit Graham’s rules, which
were fairly severe in their original form in that they required the price of the
stocks under consideration to be trading at less than two-thirds of their NCAV
or Graham’s Number. These he considered to be “Bargain Issues”, and to
quote him: “Our purchases were made typically at two-thirds or less of such
stripped-down asset value. In most years we carried a wide diversification here–
at least 100 different issues.”
Such a wide diversification may seem excessive for most investors, but
with such low-priced stock there were evidently going to be a few bankruptcy
candidates. Graham considered this strategy to be suitable for what he called
“defensive” investors. He did acknowledge, however, that there were some
“enterprising” investors who could afford to be more aggressive from the point
of view of risk. To this end, he suggested a series of less onerous criteria
for selecting stocks which is outlined below.
First, list all stocks with Price/Earnings ratios below 9. Note: Graham was
writing in 1970 when P/E’s as a whole were not as elevated by technology
stocks as they are today. Readers who are less risk-averse or who just want
to consider a wider range of stocks may wish to vary the P/E in order to see
what comes up — perhaps up to 80 percent of the average P/E of the S&P 500
would be a good start. Currently the operating average is around 18 and 85
percent of that figure is just over 15. Graham did not state if he was using a
Trailing or Forward P/E ratio, but most likely he was using Trailing P/Es. I
personally prefer to use Forward P/E ratios, especially if they are significantly
lower than the Trailing P/E as this implies expected earnings growth and
therefore possible increase in the stock price.
Once we have a list of stocks meeting the P/E criterion, we consider the financial
condition of each stock, referring to the most recent balance sheet:
Initially, Current Assets must be at least 1.5 times Current Liabilities. This can
also be gleaned via a stock screener by displaying stocks with “Current Ratio”
>= 1.5. Total Debt must not be greater than 110% of Net Current Assets (i.e.
the sum of Cash & Cash Equivalents, Inventory, Accounts Receivable).
Looking further back, we need to find evidence of Earnings Stability, with no
deficit in the last five years, i.e. no evidence of an annual loss. Additionally,
evidence of earnings growth over a five-year period is a must. This can simply
be the consideration, for example, that 2004 earnings were greater than 2000
earnings.
There should be some current dividend payout. Finally, the current price of the
stock should be less than 120% of the NCAV per share or Graham’s Number.
Where to find this number? From the balance sheet, subtract Total Liabilities
from Current Assets, and divide the result by the number of shares outstanding.
Assuming you have a positive number that is greater than zero, the stock’s price
should not be greater than 120% of this number.
At grahaminvestor.com, we list stocks that are trading within 120% of the NCAV
per share. Since this was an important measure for Graham, you can start there
and work your way backwards through the other criteria.
Graham did not set any lower limit on market capitalization. “Small companies
may afford enough safety if bought carefully and on a group basis.” He meant
that a well diversified portfolio with a fair number of such companies stock would
protect the enterprising investor from the bankruptcy of one or two companies.
(c) 2005 The Graham Investor
You may use this article, as-is, provided this copyright notice is kept intact.
ABOUT THE AUTHOR
He can be contacted via
http://www.grahaminvestor.com
