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Charts

Look for This as the Market Bounces

July 21, 2008
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Look for This as the Market Bounces

Volume is something few investors follow to any degree, yet it’s probably one of the most valuable technical tools you can use to find big-winning stocks.  Simply put, when volume (i.e., shares traded per day) spikes while the stock makes a humongous upmove (or downmove), especially near the start of a move, you should take note. Look at Walter Industries (WLT), above, a leading coal stock of 2008.  While most investors just heard of the coal growth story within the past few weeks, the market was telling you something big was happening way back in January.  Following WLT’s sharp dip...

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Reading Charts

July 18, 2008
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If there is one way in which the Cabot approach to growth investing (as opposed to value investing) differs from that of most advisers, it is that we pay more attention to what investors are actually doing.  We do that by looking at the chart that shows price movement, moving averages and volume. Leaving out the double bottoms and tops, heads and shoulders and other classic chart patterns, here are a few basic principles of chart reading. Stock with rising price on increasing volume = bullish.  This shows that an increasing number of buy orders are being processed, indicating...

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