Why Something New Can Spark Massive Stock Market Gains

A significant rise in a stock price usually starts because of something new.

This could be a product or service, a change in management, new industry technology, or something else.

After extensive study, it was discovered that the conventional thinking of “buy low, sell high” is not the best course of action when it comes to picking stocks.

In fact, what seems too high usually continues to rise (eventually), and what seems too low usually continues to fall.

By this logic, you should be looking for stocks on the new-highs list, not on the new lows list.

Ideally, you want stocks making the new-high list for the first time with big volume during a bull market.

Buy when it looks too high for the majority of conventional investors and sell after it moves substantially higher and thus starts looking attractive to some of those same investors.

However, a new high isn’t an entry signal. You must also wait for chart signals to tell you the right time to enter. You want a new high breaking out of proper bases.

If it is more than 5% above the buy point, then skip it. You will be too late.

Search for companies that have a new development and buy when they are gaining new highs off properly formed bases on increased volume.