Friday, December 05, 2008

Stock Market Trading: How to make a killing out of it - Now.

It is, of course, difficult to tell.

What I do, most of the time, when Stock Market Trading is follow the trend. If the stock market is bearish, I sell; if it is bullish, I buy.

We know the general trend in past months and weeks in the stock market is bearish, but look at this: Shares of Hartford Financial Services was $80 a share at the beginning of 2008 and fell to around $5 the other day. The company says they have enough cash to weather more turmoil in the markets, if that is the case, how low can they get? What do you think?

So? from $5 a share it rebounded to $14.59 on Friday, up $7.38 for the day. If you bought their shares, you could have more than doubled your money over night! Can it still go down? Yes, maybe back back to 5$, given the bearish sentiment of the stock market; but my I guess is $5 is its resistance, and the share cannot go lower than that.

I am not saying buy shares of Hartford Financial Services, they are just an example, what I am saying is search for those oversold companies, oversold senselessly - that they have no where to go but up. Shares that are worth a 100 last January, and now worth 10 or 15 a share.

The stock market is volatile. But during this time of recession, it is almost a gamble, but if you have been to a cock fight, you would surely understand where I am coming coming from i.e. if the company is healthy and can survive the recession, it surely has a great chance to come back to its January 2008 price. When, does it matter? 2 or 5 years? What is important is you're bet, for example of Hartford Financial Services , of 5 dollars would, hopefully gain 75$. However, if you lose - it is possible you could lose the entire bet of 5, but the possibility is remote. As I said, if they have nowhere to go but up - and they seem healthy - I'd buy.


What about oil and energy related companies? Be wary because I have read somewhere that oil prices can go as low as 25 next year.

Happy Stock Market Trading.


PS: Do not trade based on my advice, I am just a blogger, seek a professional opinion somewhere else.