Power Surge Stock Trading Strategy
This power surge trading strategy makes use of combining both fundamental and technical analysis into one approach.
The following fundamental elements are examined to qualify for a potential power surge:
- A minimum stock price of $20
- Relative strength of 85 or higher
- Strong earnings estimates of 20 % or higher
- Earning increases in the last two quarters of 25 % or higher
- Sales increase of at least 20 % over the past 12 months
- 20 day average trading volume of 100,000 shares or more
- No or very little debt less than 30 percent
- Low institutional ownership
The top three stocks in the same industry possess relative strength of 90 or higher
This approach is to seek the strongest stocks available to consider for stock purchase. Ideally you are seeking a position that has the potential to continue its upward movement for months or even years to come.
The process involves identifying stocks that meet a strict set of fundamental and technical rules.
The following technical criteria are also examined:
Price must be at a 12 month high and the previous eight weeks have seen a price surge of at least 50 percent.
This strategy isn’t very common but can be effective, you must be patient and stick to the rules set above. You won’t get many trades over the course of a year, but when you do find a stock that qualifies your potential gains will be enormous.
Daniel Iuculano, AAMS CMFC
Financial & Wealth Planner
