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Books I’ve Read / Techniques I Use
• William J. O’Neill Books– I’ve read each many times - brought up printed charts for the same
period to see how they looked on my computer
Amazon price: $55.00
First 109 pages are annotated stock charts
– Suggest reading them in this order:
Appearance In book
Appearance on my computer
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Tools I Used
• IBD’s MarketSmith software– Saves time via:
• Screening• Charting• Pattern recognition• Many proprietary screens that focus on most important factors
• Investors.com + eIBD (electronic version of IBD paper): time intensive
• IBD/eTables: (Don’t use - time intensive )
• IBD/Leaderboard (Don’t use - stock list too narrow)
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Methods I Use
– Learn to Read charts: Choose stocks with a) best fundamentals, b) breaking out of strongest bases with c) lowest base count on d) highest volume
JAZZ ranked #1 in Medical group ranked #2
1. William J. O’Neill in IBD– Analyze stock fundamentals: Choose stocks with strongest fundamentals:
– EPS % change current quarter ≥ 20%– Sales % change current quarter ≥ 20%– EPS % change up during last 3 years– Current price ≥ $10– Return on equity (ROE) ≥ 17%– Profit margin ≥ 17%
– Proprietary ratings (higher the better): • Composite ≥ 85 • Earnings Per Share (EPS) ≥ 85• Relative Strength ≥ 85• SMR ≥ 85• Accumulation/Distribution A, B, C• Leading Industry Groups 1-50
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Find Stocks From: IBD Articles & Tables• Start by choosing stocks from eIBD
Section A:UA up 60% in 8 months
QIWI up 240% in 7 monthsEDU up 90% in 8 months
Section B:
Small weekly charts of IBD 50 & Market Leaders with buy prices (pivot point)
Section B:
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Find Stocks From: Investors.com Screens
• Compare stocks by downloading & sorting in Excel: very time intensive
• View Market Pulse daily
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Quick Review IBD Bases: (http://education.investors.com/)
2. Double Bottom:
6. Saucer Base:
1. Cup w/handle:
5. Ascending Base:
4. Flat Base:
Occurs when, over 3 weeks, a stock’s weekly closing price is within 1% of its closing price during the preceding week
3. 3-weeks Tight:
Weekly Daily
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Find Stocks From: MarketSmith (IBD)• Screener and chart program in one: great time saver
2. Choose from 64 prebuilt screens
4. Click on stock to bring up chart
1. Create and save custom screens from 135 technicals & fundamentals
3. Screen Results List includes base count & % to pivot
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Find Stocks From: IBD MarketSmith
All fundamentals in one box (7 qtrs.): EPS % chng, Sales % chng, etc.
Shows base pattern & base count via pattern recognition
Can mark-up chart manually & save symbol to a custom list
Intraday, daily, weekly, monthly charts
Do stats pass IBD parameters?
Create alerts
Do back testing
Compare other top stocks in same group
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• Daily chart: Buy 10-cents above highest point from 6 primary bases• Daily, weekly chart: Sell using numerous sell rules
When To Buy: IBD MarketSmith
Shows:• Pivot point (dotted line)• RS rating & slope of RS line• Blue band = + 5% above pivot• Stage count• Red band = - 8% from pivot• % to pivot or below pivot• Green band = + 20% apprec.
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Find Stocks From: IBD MarketSmithAccess proprietary lists
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Find Stocks From: IBD MarketSmithOpen 2nd window
Shows daily view while original window is in weekly view to show all info at once
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Find Stocks From: IBD MarketSmith
Show percent gain of stock or group of stocks for any present or pastdate range
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Find Stocks From: IBD MarketSmith
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Find Stocks From: IBD MarketSmith
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Costs Compared: eIBD
• eIBD:Year Month
$240/yr ($20/mo ) $189 ($16/mo ) Yearly savings = 21%
What you get:• Investors.com articles and tables• eIBD electronic paper
Total yearly cost: $328
Yearly savings = 17%
• eTables:Year Month
$139 ($16/mo ) $168/yr ($14/mo )
What you get (each to view/sort & all to download to Excel):• IBD 50 stock list• IBD 85-85 stock list• Big Cap 20 stock list• New America stock List
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Costs Compared: IBD MarketSmith
• MarketSmith:Year Month
Yearly savings = 35% + 45 days free
$1347/yr ($112/mo )$999 ($73/mo )
Options:• MarketSmith software available on iPhone = Free• Pattern Recognition = $139• ‘Growth 250’ list with 30 proprietary screens = $349
Total yearly cost: $1487
What you get: • Screening• Charting• Pattern recognition• Many proprietary screens that focus on most important factors
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Summary: How I Make Money In Stocks Using IBD & MarketSmith
Find stocks with:1. Strongest fundamentals2. Breaking out of solid, clear bases
3. MarketSmith saves me more time and ability to find more breakout stocks worth much more than $1,487 cost (I made more than this in my first week using MarketSmith)
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Questions?
Summary: How I Make Money In Stocks Using IBD & MarketSmith
