Page 505 - How to Make Money in Stocks Trilogy

374 INVESTING LIKE A PROFESSIONAL

categories. You can then check weekly or daily charts on these potential ideas
plus earnings and sales data to pick the best ones to add to your watch list.
Most Active—NYSE and Nasdaq This daily column (also found in the print edition)
highlights breakouts and basing patterns in the best institutional-quality
stocks experiencing unusually heavy trading volume. You’ll also find a
discussion of potential buy points that indicate the best time to make initial
and secondary purchases. This column will also flag potentially negative
action as stocks reach their peaks.

Evaluate Stocks
Next, let’s look at how you can evaluate any stocks you already own or are
thinking of buying. There are many questions that should first be answered:
• Is this the right stock to own? Or are there better ones in its group?
• Is the stock in a leading industry group or a laggard one?
• If you own the stock, have you held it too long?
• If the stock looks fundamentally strong and you want to invest in it, is it
too soon or too late?
• Are we in a bull market or a bear market?
These are just a few questions that need to be answered before you make
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your move. Two IBD investing tools—“IBD Stock Checkup ” and “IBD
Charts”—will help you sort through the stock-picking puzzle.
“IBD Stock Checkup ” “IBD Stock Checkup” evaluates and compares more than
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6,000 publicly traded companies and assigns a composite rating and a pass,
neutral, or fail grade to put your ideas in the proper perspective. It’s essentially
a statistical summary report made up of several components, including
• Composite Rating
• Performance Within Group
• Group Leaders
• IBD Stock Checklist—with a pass, neutral, or fail grade

• Red Light, Green Light

For the composite rating and most of the components listed in “IBD Stock
Checkup,” you’ll see a green (pass), yellow (neutral), or red (fail) icon. This is a
quick and easy way to see if your stock passes muster in that particular cate-
gory based on time-tested CAN SLIM criteria.