As investors, the name of the game is profit REGARDLESS of brand names.
The mistake many budding investors make is thinking the brand name is where the profit lies when, in fact, profit lies in the performance of the asset.
A solid high street brand does not automatically equate to a solid stock performance. It is essential to grasp this concept early if you want to achieve the results your desire.
For example, Twitter TWTRis a stock everyone knows, but it has a horrendous stock performance since its IPO in 2013.
Compare that to the 3 stocks we will look at below.
The simplest way to make consistent profit is to use technical analysis ( a flashy word for using charts) coupled with a checklist system to establish high-probability stocks.
This will allow you to make objective decisions based on the stock's performance without being influenced by the brand name.
In short, I look for the following to consider buying a stock:
- A good history of performance
- Volume over 1 million
- The price breaking out from a long-term consolidation
- The price trading above the high of last year
- The price printing new all-time highs
Below are the monthly timeframes for three obscure stocks on my watchlist that are setting up to meet the above criteria. 2 US stocks and 1 UK stock.
Automatic Data Processing ADP
Arthur J. Gallagher & Co. AJG
I am still waiting for the S&P 500 to move above the daily 200 simple moving average. This will confirm a bullish bias to the stock market and when I will start adding these stocks into my portfolio.
By applying patience, I give these stocks time to confirm further strength to the upside. This drastically reduces the chance of me getting caught in a fake breakout and being faced with unnecessary losses.
Patience is a skill worth having in your investor repertoire.
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