By now, you should be convinced that you can make an enormous amount of money by trading rolling stocks (well, why else would you be reading this blog, right!).  As you may know, the rolling stock standard is that there are three or more buying opportunities in a 12 month period at a specific price each of which will yield at least a 15% rate of return.  This article is more about the many benefits of rolling stocks.  When selecting a profitable rolling stock, three basic fundamental elements are required; they are (1) buy fundamentally sound stocks (2) use sound technical indicators and (3) rely on some broad market indicators to gauge the trend of the market.

You want to buy a stock that you do not mind holding onto if the broad market declines significantly.  For us rolling stocks buffs, fundamental analysis is the starting point of our quest to roll to riches.  Many rolling stocks are in the lower price range and may not have the track record of earnings required to make sound fundamental analysis.  In any event, there are some websites that will give you a fundamental score of a stock. 

The second required element is selecting sound technical analysis. Whereas fundamental analysis tells us which stock to buy, technical analysis tells us when to buy.  Technical analysis should be used with fundamental analysis to determine your entry points.  At myrollingstocks.com, we use three main technical indicators; Stochastics, MACD and a simple moving average.  If you examine our charts on the myrollingstocks.com website, whenever the stochastics indicator signals and oversold condition, a small green arrow appears on the chart.  Similarly, whenever the MACD signals that the trend is changing in our favor, a green arrow appears on the chart.  There is also a simple moving average green arrow indicator.  Whenever there are three green arrows that line up vertically on our graphs, this is a very strong indicator of an entry point into that stock.

You can use the broad market indicator, the TRIN, to indicate the direction of the trend.  The TRIN incorporates the relative volume of stocks going up versus those going down in the formula.  Specifically,

TRIN = (advances/advances volume)/(declines/declines volume)

 In a nutshell, if you have a lot more volume going into advancing issues than declining issues, the TRIN will be less than 1 and that is a bullish sign.

Accuray (ARAY) seems to rolling between $5.85 and $7.00 but is not necessarily a sexy or pretty rolling stock.  The one positive sign for this stock is that the big money seems to be entering the stock because the Accumulation/Distribution indicator is positive.  At last close of $6.10 the MACD and Stochastics are indicating that the stock is poised for a potential bounce.

We think Volcano Corporation (VOLC) currently at $23.12 will probably get to $24 but does not have much more room to go up.

Accuray Incorporated (ARAY) was very attractive at $6.10 where we had it pegged last week, but is still a good pick at $6.45 and may go to $7.00

AMZN