Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market: How to Achieve Superperformance in Stocks in Any Market

by Mark Minervini

With a buildup in earnings momentum (or in some instances earnings expectations), the stock price starts to escalate because of a surge in demand for shares as big institutions buy the stock in size. A daily and weekly price and volume chart will show big up bars representing abnormally large volume on rallies, contrasted with lower volume on price pullbacks. These signs of accumulation should appear during every stage 2 advance. By the time stage 2 is under way, the stock has been moving upward in a stair-step pattern of higher highs and higher lows. The share price may have doubled or even tripled at this point; however, this may be only the beginning. The stock could still move substantially higher. If the company continues to deliver strong earnings, the growth rate will soon attract widespread attention and subsequent buying, especially if the company has reported several quarters of impressive earnings gains.