Best Stocks To Buy Right Now

This particular page is undergoing some changes. There is an update here that you must read.

Finding the best stocks to buy right now will involve a particular system. I initially used high tight flags because they were easy to find and come up with a list. But I instead want to give you the methodology as it is more important then the stock tip, and I fear the beginners will buy a stock and not sell at the right points and turn what can be a winning system into a loss. I will need to make a few updates on this methodolgy as well as it was initially created due to past success and simplicity. The first 3 stocks (HDY, APL, TZOO(twice)) I traded under this system were very successful but I got a little sloppy and it hasn’t been as easy since. TZOO in fact made 20% but I did not sell it in time and resulted in a loss. I also started to realize the stop loss mentioned by Bulkowski was different than the stoploss mentioned in this particular site as he chose a technical spot based on the low of the flagging pattern, rather than a set percentage.

Keep in mind that this trading system will be updated with a new series of posts as mentioned in the update, and I will update this page with once I start to come up with more rules to refine this method, but the introduction is here.

Additionally there will be a new page for the best stocks to buy right now and hold for the long term based on Buffettology. But that will probably be up by the end of June 2011, if not in a couple weeks

5/3 stocks and there buypoints
ADAT: 1.60
AXK: 5
INV: 3.4
DYNT: 2
TZOO pulled back after making a HTF and can bought here with a stop at $71.
ALU owned and still performing (sold at $6)

If you want to read a more in depth process, read the first update below for 02/08/2011. This uses the flag trading system. In the future if I provide a significant amount of details I will make an entirely new post and link to it from this page. As always read+agree to the disclaimer before acting on this advice.

Newest updates are on the top of this page.
4/21:We have another comrade by the name of woodshedder helping us find HTFs. Many of the stocks mentioned on 04/06 may still be relevant high tight flags to buy now. TZOO is forming another HTF just as it did in November before it exploded from $35 and I love it. It’s 52 wk high is 84.84 so buypoint is 84.94. If stock breaks below 70 it looks like a double top, so even though the 20% consolidation is below 67.87, you may want to avoid it if it drops below 70.

04/06: This time I will leave the chart analysis up to you. The screen of 25% earnings increase and 65% price increase in last 3 months. Now based on what you’ve learned from the stuff below, can you identify a high and tight flag that looks good to buy?
ALU,ASGR,AXPW,BSET,BSFT,CLRO,COOL,DUSA,GLUU,GMCR,GPOR,IPGP,ISTA,KYCN,MCBI,MCZ,MERC,NSM,PKT,ROYL,RPRX,SHS,SIMO,SYMX,TA,TBL,TDSC,TXCC,TZOO,WNR,XETA
disclaimer as of 4/14 I own ALU
3/24:Best stock to buy in my opinion is SRZ if it crosses and closes above the 30 day moving average. There were some others that looked okay

Disclaimer, I have stop buy orders on this this one and will be buying it or may already own this as of the time I post this.

02/27/2011: Time for a new update.
Screen is
% Price Change (12 Weeks) > 60%
Last Close >$1
Last Yrs Growth (F[0] / F [-1]) >20%
% Change EPS (F(-1)/F(-2)) >20%
From that we get the following:
ACAD,ACBC,AEN,ALLT,ALU,ARAY,ATGN,BASI,BHWB,BRKS,BRN,BSET,CIMT,COOL,CRIS,DBLE,ECGI,EMKR,EMMS,EXEL,FNSR,FXEN,GCFB,GLUU,HHGP,IBCP,IO,ISTA,ITMN,JDSU,MCBI,MCZ,MERC,MERR,MFLU,MSHL,PLBC,RAMR,RAS,RHB,SHZ,SIMO,SPNS,SVBI,TA,TDSC,THC,THLD,UQM,USAT,VBFC,VSCP,VVTV,VYFC,XETA,ZLCS

From those I manually look at charts, you can do the same.
I think the following are worth considering provided they are within 5% of there buypoint and should be bought when they broke above it.
cris,brn, mcbi,dble, jdsu.
Finally, ibcp shows a previous breakout and is currently on a restest. Generally, performance tends to not be as good after a return to or below breakout point, but still is worth considering as it has returned below it’s 2nd buypoint, but not quite to it’s first buypoint.
Perhaps none of these stocks are right to buy now, the list doesn’t look as good as it has in the past, but there a a handful of other stocks with potential, and these could turn out to be buys in the future.

I also want to say that many of these stocks mentioned aren’t really all that great.

CRIS is biotech, brn has too deep of a corrective phase, MCBI has  a very short term corrective phase before breaking out (above it’s peak in less than the 3-5 week range), DBLE hasn’t conclusively broken and stayed above it’s intraday high, and is retesting as well, JDSU has crossed the first downward trend-line buypoint with a breakout, but it is fairly early and there wasn’t a significant move on higher volume and there is some overhead resistance..

02/08/2011:
The best stock screen around to my knowledge identifies the best chart pattern, which is the high tight flag according to extensive research done both by William O’Neil, and Thomas Bulkowski.  So the best stocks to buy right now are going to be high and tight flags. Of high and tight flags, generally the best are going to show explosive earnings growth of at least 20% year over year.

Rather than give you fish, I will give you fish and teach you to fish as well. This has been taught before and will be repeated because the concept is simple, and there’s no point in fooling with success. The details may matter, but without them you still should be able to see success provided you use a good money management system and everything else that’s important to investing. (For more information see the high tight flag trading system)

We want earnings up 20% or more the last 2 years (the last year is okay, but I got 80 results and I would like less). It should be up 60% in the last 12 weeks. Technically it should be up 100% in 8 weeks then it can consolidate up to 20% for  the next 3-5 weeks, but it also could have declined for awhile before increasing and we don’t have an option to select 8 weeks so this is why we choose 60%. We also don’t want stocks under $1. Penny stocks are not a good idea.

% Price Change (12 Weeks) > 60%
Last Close >$1
Last Yrs Growth (F[0] / F [-1]) >20%
% Change EPS (F(-1)/F(-2)) >20%

Results (58 of them): ACAD,AEN,APKT,ARAY,ARB,ARSD,AUDC,BASI,BRKS,BRN,BSET,CACB,CHBU,CHMP,COOL,CPWM,CRDC,CRIS,CRUS,CTHR,DBLE,DNN,EMAN,EMMS,EXEL,FNSR,FRG,FXEN,GCFB,IBCP,INTT,ISTA,JDSU,KLIC,LULU,MCBC,MCBI,MCZ,MFLU,MGIC,MITK,MSHL,NTRC,NTWK,OCLR,OMEX,OYOG,PXPLY,SHZ,SIMO,SNIC,USAT,VSCP,VVTV,WAVX,WTT,ZLCS

If you want to save yourself a little extra work you can either increase the price change percentage to 80% or increase the earnings growth to 40%.

58 stocks to buy is too many! Lets narrow that list down by eyeballing the charts. What I am looking for is a chart that has exploded to the upside, and stayed relatively tight without two much consolidation. I am looking for a move to the upside then a gradual, steady, low volume decline. I am looking for a stock that has not yet broken out as I don’t like to be late to the party. I don’t have anything scientific about this process. I used to check every single stock to make sure it passed the 100% up within 2 months and less than 20% decline, but I find I generally can tell at first look, and doing anything else seems to be a big time consumer. Maybe there are 20 of these that would make good buys but I only need 1. There are a number of stocks that have just started what could be their consolidation, but I don’t like to wait. Initially there is one that catches my eye. Then there are those that have just broken out that look good, or even that are just at the break out point. If I was ready to buy a stock today I might look at those, but the market is closing soon and by the time I finish this post and you read it they could have broken out anyways. That may happen anyways, but still, I like to give at least someone a chance before I rad the next one..  Then there are those that just recently broke above a dollar that look good. I don’t feel like getting into these as I prefer stocks that have been around for awhile without the need to dilute the shares and/or have a stock split (which doubles the shares and reduces the price) There are a couple that are decent, but aren’t ready yet and aren’t as good as the other two. So ultimately I am left with 2, until I spot one last one that just broke out on increasing volume, that is within 5% of the breakout that looks too good to ignore. Then I added one that could turn out to be good, but is in consolidation for good measure.

The best stocks to buy right now in my opinion are then… (drumroll)

ARSD,CRIS,VVTV and SIMO.

There’s a problem though, not all of them match the criteria to be high and tight flags. up 100% in 2 months THEN consolidation of under 20%. So that leaves VVTV and CRIS.

As I was talking VVTV went higher, but if it’s within 5% of the buy point of $7.29 (buypoint is 10 cents above the high) Then according to the rules I use, it’s still a buy.

CRIS looks great, too bad it’s biotech It’s consolidated for over 3 weeks, it passed the initial downtrend of the consolidation phase marking it’s first buypoint and is within 5% of that buypoint. Interestingly enough, it formed sort of a horizontal point and it’s sitting right at it now. A break above this might be considered a buy to those that trade short term double bottoms. However, it is still going to have room to run above this mark, where it will reach a 2nd buypoint (or 3rd if you count the double bottom). Normally I wouldn’t like the sharp drop after it peaked but it bounced back immediately and began to make higher lows from that point indicating  that the sellers are losing confidence and the buyers are gaining confidence.

This stock was updated just before market close on 02/08/2011. Information is subject to change, please see site disclaimer and invest responsibly.