One reader had asked about when to buy the stock. If he bough a stock which is trending higher, then the next day, the stock retraces back. He sells the stock and after his selling, the stock again moves up.
Actually, any stock in an upmove does not go up in a straight line. It goes up a little bit, retraces down for some days and then resumes its upward journey.
So, the best strategy is to wait for a retracement to consider buying the upward trending stock.
But the risk of waiting for retracement is that the stock may never retrace and just zoom upwards.
Here is another alternative buying technique.
BUy just 20 percent of the stock now..(that is one fifth of the total quantity. Then, buy more when the stock retraces and then resumes its upward journey. Keep adding during each retracement.)
The advantage of this method is that the initial risk is low. Also, you have already made some profits on the first lot, when you buy the second lot on retracement.
The Dow Jones average has bounced from the 50 days average. The over all trend is still bullish, because both the moving averages are sloping upwards.
Here are the stocks moving upwards
TXN
SLB
KO
HAL
CAT
BRCM
* For education and entertainment only
