How to Find the Best Buys in the Market

Welcome to the Rude Awakening for February 3, 2021…

We have a special segment for you today. I’m going to show you how to find the best buying opportunities in any market.

I’ll walk you through everything you need to look for to pinpoint buy signals.

But first, a quick look at what’s going on in the markets this morning…

Mixed Bag in This Morning’s Market

As you know, we are in the swing of earnings season. Some of the monstercap stocks have reported earnings, and big players like AMZN and GOOG are trending up because of their reports.

Among the major indices, it’s a mixed bag. Partly due to digesting numerous large cap earnings results and because of “incrementally more positive news on both the vaccine and stimulus fronts out of Washington,” as Yahoo Finance reports this morning…

The S&P 500 and Nasdaq each rose, while the Dow sank as shares of Amgen (AMGN) sank after reporting a disappointing full-year outlook.

The three major indexes ended higher for a second straight session on Tuesday, and the Dow posted its best single-session gain since November. The rally came alongside a precipitous decline in shares of some of the stocks that had been highly popularized on the Reddit forum r/wallstreetbets last week, including GameStop (GME), which more than halved on Tuesday to $90 per share, and AMC Entertainment (AMC), which sank by more than 40%. Both stocks stabilized in pre-market trading.

Shares of mega-cap tech stocks advanced, helping buoy the S&P 500 and Nasdaq. Amazon’s stock (AMZN) rose more than 1%, as investors considered the company’s record quarterly results alongside the announcement that CEO Jeff Bezos would be stepping down from his role later this year, with Amazon Web Services chief Andy Jassy set to replace him. And shares of peer Big Tech giant Alphabet (GOOG, GOOGL) increased more than 7% after reporting fourth-quarter advertising revenue that rebounded strongly from earlier in 2020.

Meanwhile, discussions for additional fiscal stimulus carried on in Washington, D.C. The Senate narrowly voted on Tuesday to open debate for a budget resolution for the 2021 fiscal year, with an eye toward advancing additional coronavirus relief aid with a simple majority instead of the 60 votes needed for most legislation in the chamber.

More upbeat news on the vaccine front also emerged from the Biden administration. The White House is now set to begin shipping COVID-19 vaccines directly to retail pharmacies in addition to continuing with deliveries to states, in a move that will raise the weekly supply of shots by 1 million to 11.5 million.

A mixed market might make a novice investor nervous. But that’s why today’s video is so important. You can find amazing buys in any market conditions.

4 Steps to Find the Best Buy Signals

If you caught yesterday’s Rude, this list will look familiar…

  1. Technicals

The technical analysis through the MACD, stochastics, relative strength index (RSI), all give us buy signals.

  1. Inner circle

Insider trading happens every day. It’s legal as long as it’s reported to the stock exchanges and the SEC. What are called “highly compensated individuals” in a company have the ability to buy and sell company stock, they just have to make it public record. So, because of this, we can see whether company insiders are buying or selling.

  1. Valuation

We look at P/E ratios, price to book ratios, price to sales ratios. These numbers need to be in line to constitute a buy.

  1. Fundamentals

We need to see strong earnings reports, growth, profitability. And we want the company’s trend to be going up.

When all four of these criteria align, we know we have a buy.

And using these, we shared 6 companies to add to your buys watchlist…

First Community Corporation (NASDAQ: FCCO)

MercadoLibre, Inc. (NASDAQ: MELI)

Skyline Champion Corporation (NYSE: SKY)

Intel Corporation (NASDAQ: INTC)

Myomo, Inc. (NYSE: MYO)

APi Group Corporation (NYSE: APG)

Have a great rest of your trading day.

We’ll talk tomorrow.


Scott Stewart

Scott Stewart
Editor, Rude Awakening

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Scott Stewart has been trading for decades. He has acted as an analyst and educator on the stock market for just as long. As your Rich Dad's Weekly Cash Flow analyst, Scott works tirelessly to ensure you know everything you need to do when entering into new positions, and adjusting trades as you go along....

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