On my blog Financial Tides I'm always looking for something to buy even when times are tough. Don't get me wrong, there are times when you should not be fully invested. Only buy when a stock meets all of your criteria. When times are rough, take your time and try to find the best sector and then find the best stock or two in that sector. It's not that hard.
I screen for stocks with BarChart because its simple to use, very reliable and relatively inexpensive. Many of the features are even free.
First I go to the sector section and sort for the sector that had the largest percentage gain in the last month. I want to know what is happening now not last quarter. Today the Gold sector has the highest percentage with a 102% gain last month. Next I sort for the 14 day relative strength so I have the gold sector ranked by positive movement in the last 14 trading days. I then consider only the top 10.
BarChart uses 13 technical indicators to come up with their buy and sell recommendations and since I only want the best I look for stocks rated a buy of 80 or 100%; lower than that and I won't take the risk. Today just 2 stocks make my screening criteria so Nevsun Resources -- NSU and Gold Reserve -- GRZ are the only ones I'll look at. Both stocks rate buy on 12 of 13 indicators with only 1 hold.
I next want to know about the number of highs they have hit recently. NSU has hit 8 new highs in the last 20 trading sessions with 4 new highs in the last 5 days and a 65 day price appreciation of 109%. GRZ has hit 6 new highs in the last 20 session and 4 new highs in the last 5 session with 119% price appreciation in the last 65 days.
I'd take a flyer on these 2 but never with more than a 5% portion of my portfolio. These are very volatile stocks in a volatile market so I'll use stop losses to protect my downside.
Recommendation: Buy Nevsun Resources -- NSU at 3.04 with a stop loss at 2.50 and Gold Reserves -- GRZ at 1.03 with a stop loss at 90 cents.
Jim Van Meerten is an investor who writes about financial matters here and on Financial Tides. Please leave a comment below or email to FinancialTides@gmail.com
Disclosure: I do not hold position in NSU or GRZ at the time of this publication
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