Editorial StaffBuying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. So what are the best stocks to buy now or put on a watchlist? Google-parent Alphabet (GOOGL), Fortinet (FTNT) Goldman Sachs (GS), Cleveland-Cliffs (CLF) and Albemarle (ALB) are prime candidates.
Since the coronavirus bear market, stocks rebounded powerfully. The strong action reflects rising confidence that the economy will eventually recover from the coronavirus.
But Covid remains a concern, even as vaccinations reach more and more Americans. The rising number of cases of the new Delta variant is a worry.
The major indexes have been rallying after a spell of pressure. It is trying to shrug off inflationary worries and the possible demise of the heavily indebted China Evergrande. Increasing clarity on the Federal Reserve’s approach to tapering bond purchases has been a help.
Best Stocks To Buy: The Crucial Ingredients
Remember, there are thousands of stocks trading on the NYSE and Nasdaq. But you want to find the very best stocks right now to generate massive gains.
The CAN SLIM system offers clear guidelines on what you should be looking for. Invest in stocks with recent quarterly and annual earnings growth of at least 25%. Look for companies that have new, game-changing products and services. Also consider not-yet-profitable companies, often recent IPOs, that are generating tremendous revenue growth.
IBD’s CAN SLIM Investing System has a proven track record of significantly outperforming the S&P 500. Outdoing this industry benchmark is key to generating exceptional returns over the long term.
In addition, keep an eye on supply and demand for the stock itself, focus on leading stocks in top industry groups, and aim for stocks with strong institutional support.
Once you have found a stock that fits the criteria, it is then time to turn to stock charts to plot a good entry point. You should wait for a stock to form a base, and then buy once it reaches a buy point, ideally in heavy volume. In many cases, a stock reaches a proper buy point when it breaks above the original high on the left side of the base. More information on what a base is, and how charts can be used to win big on the stock market, can be found here.
Don’t Forget The M When Buying Stocks
A key part of the CAN SLIM formula is the M, which stands for market. Most stocks, even the very best, follow the market direction. Invest when the stock market is in a confirmed uptrend and move to cash when the stock market goes into a correction.
The stock market looks to have cleared a rough patch, which was spurred as inflation fears and concerns about the rise of the delta variant of the coronavirus weighed on the market.
The market is now back in an uptrend after clearing stubborn resistance. Rising energy and metals prices have been a tailwind. Higher Treasury yields have helped many financials and weighed on growth stocks, but the market has been resilient.
This Dow Jones, Nasdaq and the S&P 500 are all now well clear of the key 50-day moving average after another strong week, despite a few wobbles. Indeed, the S&P 500 and Nasdaq hit record highs.
The market is now back in a confirmed uptrend. Bear in mind that the strongest stocks tend to go their strongest price runs in the early innings of a new uptrend. This often happens within just a few days or weeks of the switch from “market in correction” to “confirmed uptrend.”
Now is a good time to be buying fundamentally strong stocks breaking out of sound chart patterns. The stocks featured below are potential candidates.
Remember, things can quickly change when it comes to the stock market. Make sure you keep a close eye on the market trend page here.
Best Stocks To Buy Or Watch
- Fortinet
- Goldman Sachs
- Cleveland-Cliffs
- Albemarle
Source: IBD
