stock chart-how do u know what you're looking for?

Question

p/e volume? which one do u look for and why? do it connect to one with the other to make it a perfect stock? what else do u look at when view the graph and chart?

Answer 1

There is no perfect way to find a good stock because any company could have a scandal that really drops the price. If there was a perfect way, all the poor stocks would be trading at zero volume.

There are different ideas of how to do it. There are technicals such as with math formulas and chart reading, but all of that is based on past performace.

Then there is the idea of buying what you know (invest in Coke if you like Coke) because you would have a better idea about the product and sales than somebody that has no idea what Coke is.

There is the idea of sector rotation which is based on the concept that stocks in a sector that fall out of favor will come back into favor at some point in time.

Then there is the idea of future needs. For a short term example, you are experiencing the hotest day of summer and you hear that it's going to be a very cold winter. It's time to buy anything stock related to a cold winter.

Answer 2

Stock charts are only a part of a complete trading/investing system.
You may want to look into CANSLIM as a starting point. This is outlined in the book "How To Make Money In Stocks" by William O'Neil.

Ultimately, you will need to focus on a small handful of chart formations, and weed through many stocks to figure out which stocks work best with these formations. Good luck.

Answer 3

p/e has nothing to do with charting....your mixing fundamentals with technicals

read up on t/a:
Technical Analysis of Stock Trends by Magee, John; Edwards, Robert D.
5th edition