Frequently
Asked Questions
The How, What, When and Why
of WaveStocks.com
What are “Wave” or “Channeling” stocks?
Simply put, channeling stocks are stocks that are trading in a range of
prices. While no stock will trade in a specific range forever, many stocks will
bounce up and down with a channel, much like the shape of a wave. As long as the
stock stays inside this channel, profits can be had by buying at the bottom,
then selling at the top of the range where resistance is greatest.
How do you find these Channeling Stocks?
Plenty of hard work and many hours of staring at computer
screens! We have several screens and programs we run that narrow down the number
of stocks with possible wave patterns to several hundred each day. However, it
always comes down to human eyeballs, experience and pattern recognition skills
to narrow the number of stocks to the best 10-15 each week.
When is a good time to buy?
When we post the charts each week, we feel that they are
excellent buys right then and there. We do also list the “support” price,
usually a bit lower than the current price. This is the price that the stock has
historically shown as a “low”. Therefore, since some of the stocks were profiled
slightly above that support price, there is a chance of a slight decrease in
price before the “bounce”.
Please use only stocks that we posted no more than a few
days before, and do not consider stocks that traded much higher. Do not consider
stocks that broke below the "support" price.
When is a good time to sell?
Along with every chart, we do show what we feel is the
“resistance” price. That is, the price where a larger number of sellers come
into the market and usually stop the uptrend. However, since conditions change
all of the time, we would recommend using a limit sell order below that price,
or using a trailing stop-loss order which does not sell the shares until the
uptrend has broken.
In short, while we expect the stock to make it to near the
'resistance' price, they don't always do so in a timely manner, so take profits
when you can!
How long is the average holding time?
This can vary widely. Taking a look at the charts will show
the previous timeframes. On some stocks, it can be several weeks, and others
can be just a few weeks or days.
How do you find these Wave Stocks?
Plenty of hard work and many hours of staring at computer
screens! We have several screens and programs we run that narrow down the number
of stocks with possible wave patterns to several hundred each day. However, it
always comes down to human eyeballs, experience and pattern recognition skills
to narrow the number of stocks to the best 10-15 each week.
How many of your stocks are winners?
On average, we’ve had about 80% success. In other words, 8
out of 10 of the stocks profiled did provide a bounce as we expected and did
continue the pattern, at least long enough for holders to capture a nice profit.
About 2 of the 10 either did not follow their expected pattern, or dropped below
the “support” price by too much to be considered a winner, even if they did
bounce back and produce gains. While we cannot guarantee this percentage for our
readers in the future, this is the average we’ve been able to obtain so far.
Do you profile Blue Chip stocks or smaller companies?
Actually, both. A majority of our profiles will be medium
sized companies mixed in with a few large companies as well as smaller companies
with small stock prices. The lower the stock price, the more unpredictable and
volatile they can be, making our job more difficult. However, we do like to
profile at least a couple small stocks each week as these can provide the
fastest wave patterns and the fastest profits.
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