The main thing I need to know before investing in a company, after I know its Magnet® score, is whether supply or demand is in control of the stock price. Taking a small gain in a stock and then seeing it 50%- or 200% higher a year later began to drive me nuts!
I look at and show Point & Figure charts because they can slow your mind down and help me garner bigger profits. In order to hold a stock for 5 or 6 consecutive Buy signals, you have to own a stock though 4 or 5 columns of O’s. This is where true patience comes in.
I want to generate cash flow by trend around a stock price using technical analysis. I use several as you can see on the custom charts I have created. Sometimes when a stock looks weak and is drifting down on lighter volume, technical can keep me in as others are selling. The difference is often “knowing what you own” and also being comfortable with the valuation.
Looking back at RPC, Inc. (RES), Acacia Research Corporation (ACTG), Crocs, Inc. (CROX), and IDT Corporation (IDT) since November can help you understand Magnet and the trading/investing process.
*DISCLOSURE: No relevant position
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