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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