• How High Growth Socks are selected

    High growth stock selections are chosen based on fundamental and technical characteristics existent in stocks that have made large moves over months to years in the past. CSCO, NFLX, and AAPL are examples of high growth companies from the past. Before they made their move they showed considerable earnings with acceleration with good sales and profit margins and they had unique product offerings that allowed for continued growth. Once companies are found with excellent fundamentals the timing of purchases are based on the relatively less risky break outs of sound sideways price consolidations.

    Short stock selections are based 100% on technical analysis of the stock and the market. Shorting can be initiated when the market is suspected to be topping or in a clear bear market. Because shorting is difficult in volatile markets only liquid stocks are chosen (trading more than 1M shares per day). The stock must have been a prior leader (made significant advance in the prior rally). The picks are based on two topping patterns (head and shoulders top and failed late stage base). The primary short timing is often many months after the identified top when the stock price rallies into logical areas of resistance such as the 50 or 200-day moving average. Shorting very close to the reference resistance level provides a clear area to cover the short position at small losses if the stock rallies instead of drops.