There are many indicators designed to give the user some insight on when it’s good to buy into or sell a stock. Generally speaking, you want to buy at valleys and sell at peaks. Some well know indicators include, but are not limited to; MACD, SMA, EMA, Bollinger Bands, Ultimate Oscillator, RSI, Williams %R and many more.
Charting
There are various free sources for charts online, such as yahoo, google, and stockcharts. Many online stock broker services also have built in charts and tools; TDAmeritrade, Scotttrade, and ExTrade. Personally my favorite is to get a price history from yahoo, download the csv file and open it in Excel. Then play around with different indicators and strategies. See http://flamanthablog.com/?p=24 on how to do that if you’re curious. 🙂
thoughts
Typically analysts advise against using just one indicator as the only source of determining whether or not to buy or sell a stock. Thus any good strategy is to use a combination of indicators (see http://www.investopedia.com/articles/trading/12/using-trading-indicators-effectively.asp). The trick is to decide which combination and exactly which range or numerical variation of those indicators will determine or trigger in your strategy of when to buy or sell. In my experience, I haven’t seen any consistent success while using any indicator or combination of indicators. I’ve tried several indicators in back tests while switching the variables in a spreadsheet across multiple stocks. Some were successful for a particular stock at a particular time period, but the “formula” didn’t hold up when applying the strategy across the board. After a fair amount of back testing across multiple stock symbols, I typically found success to be 50/50. This tells me that my success is no better than throwing darts. However that being said, it is certainly possible that I didn’t try the right combination with the right variables. Please let us know if you’ve had any better experience then I had. I would love to hear it.
flamanthablog 