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HOW TO BUILD AND MAINTAIN AN ACTIONABLE WATCH LIST
Blaine Phipps
20 Febuary 2014
Key to Success
How can you find these opportunities?
• It all starts with having a watch list and game plan ahead of time
• It is import to always maintain a current watch! No matter what state the market is in.• It is especially important during times when the market is in a
“Downtrend”• You need to know which stocks are strongest and ready to breakout when the
market goes into a “Confirmed Uptrend”
• During “Confirmed Uptrends” you need to be ready for stocks that are about to breakout
• Use the following 5 steps to help you catch the next round of big winners
Step 1: Make 2 watch lists
• List 1: Near Buy Point• For stocks near a potential buy point right now
• List 2: Radar Screen• For stocks with traits you look for, buy not currently near a buy
point• You want them on your “radar screen” if they offer buying
opportunity later
Step 2: Limit the number of stocks you’ll put on each list
• Your watch list must be actionable• If you have too many stocks, you won’t be able to watch them and
act at the right time
• What’s the maximum number you should have on your lists?• Depends on how much time you have to do research• If you only have a few minutes each day, plus time on weekends:
• “Near Buy Point” list: 5 – 10 stocks• “Radar Screen” list: 10 – 15 stocks
• Be Selective!• Focus on true market and industry leaders• Superior sales & earnings growth• Strong return on equity• Other CAN SLIM traits (see buying checklist document)
Step 2: Limit the number of stocks you’ll put on each list
• Get to know the stocks on your lists• Use IBD Stock Checkup on Investors.com to learn more about the
stocks on your lists
• At the top you will find a short description of what the company does
Step 2: Limit the number of stocks you’ll put on each list
• Get to know the stocks on your lists (cont.)• See how the stock ranks among it peers
Step 2: Limit the number of stocks you’ll put on each list
• Get to know the stocks on your lists (cont.)• Check out the stocks CAN SLIM ratings
Step 2: Limit the number of stocks you’ll put on each list
• Get to know the stocks on your lists (cont.)• Read some articles about the stock
Step 3: Use IBD screens & articles to find stocks to add to your watch list
• Weekly Routine (Scan IBD 50 & Your Weekly Review)
Step 3: Use IBD screens & articles to find stocks to add to your watch list
• Market Pulse in the Big Picture (Daily in the B section)
Step 3: Use IBD screens & articles to find stocks to add to your watch list
• Stock Spotlight (Daily in B section)
Step 3: Use IBD screens & articles to find stocks to add to your watch list
• Sector Leaders (Daily in B section)
Step 3: Use IBD screens & articles to find stocks to add to your watch list
• IPO Leaders (Tuesday & Thursday in B section)
Step 3: Use IBD screens & articles to find stocks to add to your watch list
• New High List Analysis (Daily in B Section)
Step 4: Make a specific game plan for stocks on your “Near Buy Point” list
• What is the potential buy point?• Is overall market in confirmed uptrend?• How much volume do you need to have a confirmed buy• How many shares will you buy if the stock breaks out on
heavy volume?• What is your stop price?
• Maximum of 7 – 8 percent of your buy point• May be less if you can identify a logical point of support
• Answer these questions ahead of time! Be ready to take action without hesitation.
Step 5: Regularly update your watch list
• Make it part of your weekly routine• If a stock on your “Near Buy Point” list breaks out or
breaks down, remove it• If you don’t regularly weed your list, it can quickly become
a junk drawer• If you reach the maximum number of stocks on your list,
take off the weakest stock before adding a new and better one
Monitor the stocks in your “Near Buy Point List” and be ready to act
• Watch to see if the stocks in your list breakout in the coming days and weeks
• On a breakout, look for volume at least 40-50% higher than normal
• Heavy volume shows conviction among big investors• That convictions is needed for the stock to make a big move
• Check “Big Picture” to confirm market is in “Confirmed Uptrend”
Example of how you could have used this routine to find winning stock in uptrend started 12/20/11
Example of how you could have used this routine to find winning stock in uptrend started 12/20/11
Example of how you could have used this routine to find winning stock in uptrend started 12/20/11
Two weeks laterRAX broke out