When looking for good stock picks, it is important to remember that to be successful with your stock investing strategy, you should buy low and sell high.  The problem is how you are to decide if a stock has reached its high or low point.  Without a crystal ball, no one really knows for sure.  The thing you need to do is look at the fundamentals of the company.  Have they consistently had good earnings?  How do they compare to their competition?  How much in demand is their product niche?  These are all good questions to ask.

Looking at the technical analysis is another important step.  How has their stock price acted over the past six months or even the past year?  Have it had a good consistent climb with not much volatility.  Unless you are day trading, buying stock that is volatile is an extreme gamble.  You really do not know when it will take its next swing up or down.  Consistency should always be the name of the game with your stock investing.  You simply can not afford to be trying to guess if a stock is swinging up or down.

When you are evaluating two stocks that are at two extremes, you need to watch out for that can’t miss feeling.  If you are looking at a stock that is near its 52 week high, and has had a good consistent climb upward.  This stock’s technical readings also indicate it may be due for a downward dip.  The other stock has had a downward trend and is trading well below its 200 day average.  At one time it did have a good climb and had some great days.  However, now it is down and its technical indicators state that it is due for a climb back upward.  This is an uncertain scenario.  Just because the first stock is near its 52 week high does not mean it is going to go into a downward trend.  Also just because the second stock is down low does not mean it will turn and move upward.

Getting back to the fundamentals is what needs to be done with the analysis of these two stocks.  Dig into what is really going on.  The first stock very well may be on track for a breakout and is due to climb another 25 percent.  The second stock may just stay down in the dumps.  Do not be afraid to invest in a winner if the fundamental analysis indicates it is a good investment.  You may just end up watching it climb forever.

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