These are the 5 bare minimum basics that I use when trading.
1) Market cap
• good: 50 Million - 2 Billion
• institutions will tend to buy within this range increasing the share price!
2) P/E ratio = share price/ earning (ratio)
• good: 15-30 P/E!
3) RSI = relative strength index (in the last 14 days)
• indicates whether shares are undersold or oversold (momentum of stocks)
• under 30: oversold/ undervalued!
• over 70: overbought/ overvalued = indicator that share price will tend to drop = sell when RSI is high!
• good: RSI 12-30!
4) Beta: measurement of investment portfolio risk (measurement of activity)
• good: over 1
5) Average Volume: number of shares that are sold and bought per day (how liquid the
stock is)
• good: over 500,000 (Ideal: Over 2 million)
