Check List before and after you purchase a Stock

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It's quite some time I never write here.

Recently, received few inquiries about investing in stock market. Is it good time to put money in stock market now? We are currently at the second half of bull market (I think since 2008 till now, we don't have any meaningful correction) and I will consider market now more towards Technical. (You must refer to chart for trending). If you want to put money in stock now, bear in mind to play short term, or I call it speculate. (The first half of market already past, where people purchase blue chips stock to keep, now just waiting suitable time to sell, that is real investment)

It's fine to speculate in stock market, provided you have your own check list to protect your position. However, if you do not have any, below are sample of check list for those who like to play short term. Usually, if a broker / friend recommend a stock, first, I will check on below:


1. Check Daily and Monthly chart for 10 Days moving average line, is it trending up? (example of below chart showing moving average trending up)




2. Change to weekly chart, is the latest bar Green?

3. Check daily chart, for the last 10 days, is it more than 6 days in Green?


The answer must YES for all 3 items, then it's safe to enter this stock.


After you have purchase the stock, then cross check on below list again:


1. After purchase, the stock price below your buying price for 5 days or below 10% of your buying price --> Sell

2. The stock price consistently down for 3 days, or 1 week down for 4 days --> Sell

3. If you notice in any day, volume increase 2 to 3 times more than average daily volume and stock price close near day low --> Sell

4. From the daily chart, if the 10 days moving average line flag toward down --> Sell

5. Weekly chart, after price high and volume increase, then following week, weekly chart show black bar (no matter small bar / big bar) --> Sell.


The above 5 points must be checked on daily basic, once you notice any of scenario happen, just sell the stock. This will protect your holding in the volatile market.




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