Now that the GMI is 6 and many stocks are hitting new 52 week highs again, I am looking for strong stocks to buy. As you know, I prefer to buy stocks that have already doubled in the past year and that are trading at or near their all-time highs. I also want the stock to have appeared on the IBD New America or IBD100 list. FFIV meets all of these criteria. It is also a concept stock selection of my talented stock buddy, Judy. The weekly chart has the technical characteristics I look for, although the stock is extended on a daily basis. Finally, the stock appeared on my Darvas Scan that identifies stocks that have many of the attributes he liked. Below is the monthly chart of FFIV showing that the stock has recently burst through its all-time high reached in late 1999. (Click on chart to enlarge.) I purchased a little of FFIV and will add to it if it keeps rising. Other stocks that appeared on Wednesday night’s Darvas scan include: OPEN, APKT, VIT, BIDU, NTAP, ARMH, HWK, GSIT and IDSA. I own some of these. Please do not ask me to post my Darvas Scan. In the future I will post promising stocks that come up in my scans.
Hi Dr. Wish:
I’m a very novice investor, so pardon me for this naive question, but I always heard that one was supposed to buy low and sell high.
In this case, you are buying at a high. Please clarify.
Thanks, Sharon
FFIV is nice because it’s also in one of the strongest sectors right now. ISPs are the third best sector YTD. http://www.finviz.com/groups.ashx?g=industry&v=140&o=-perfytd
Hi,
To clarify your point Sharon, buying low selling high is the common wisdom on the market, which 95% of the time is dead wrong. Buying a stock when it reaches a high means more than likely the stock will go even higher. However, before you put your hard earned money into any stocks, I suggest reading up on some technical analysis books that DR. Wish has posted on his blog, they will come in handy.
In April you wrote these words: “Again, I learn that it may be better to just ride the ultra index ETF’s than to try to find the few stocks that will beat it.” What happened to that thought? Once the trend is establised, as you seem to have done today, why not follow your own advice?
Thanks for your reponse.
You are correct, Tom. I find it hard to completely ignore individual stocks even though I do also trade the ultra ETF’s. Moreover, I think that my readers often prefer to trade stocks. So I write about both.