Step 11: Price Chart
Check the price chart before you buy. Growth stocks should be in an uptrend, meaning the price should be above both its 50-day and 200-day moving average when you buy. The ideal buy point is when the 50-day MA has just recently moved above the 200-day MA. There is added risk if the stock has already made a big move up, that is, if the share price is more than 50 percent above its 200-day MA.
Impath was trading at $48, above its 50-day moving average and more than 60 percent above its 200-day MA in June 2000.
Get Fire Your Stock Analyst! Analyzing Stocks on Your Own now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
