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

Once this initial criterion is met, I run “overlay screens” and look at the company’s fundamentals to narrow the remaining universe of candidates. Simply put, no matter how good a company looks fundamentally, certain technical standards must be met for it to qualify as a buy candidate. For example, I will never go long a stock that is trading below its declining 200-day moving average (assuming 200 days of trading exist). No matter how attractive the earnings per share, revenue growth, cash flow, or return on equity may be, I won’t consider buying a stock that is in a long-term downtrend. Why? I want to see some interest in the stock, preferably from big institutional investors. I’m not interested in being the first one to the party, but I do want to make sure there’s a party going on. The goal is to eliminate stocks that are not worth my time so that I can focus on contenders that have the best chance of being the next superperformers. Buying stocks in long-term downtrends will significantly lower your odds of owning a big winner. However, if you want to increase the odds, you should focus on stocks that are in a confirmed uptrend.

Risind 200dma.. rising