The Top 20 Monthly HOT PICK list is selected during the 1st week of every month and it will match the intermediate term trend of the market. If the market is in an intermediate term uptrend then they will be longs and if the market is in an intermediate term downtrend then they will be shorts. If the market is choppy then the picks will be a mix of longs and shorts. Refer to the Spreadsheet to your left which is our Top 20 HOT PICKS for July 2005 thru the close on Oct. 14, 2005 as a sample. The stocks will be followed and paper traded in accordance with the Phoenix Trading System Rules to obtain the % return.
The ultimate intent of this service is to highlight a group of MID AND LARGE CAP stocks that possess both strong fundamentals and strong intermediate to long term technicals simultaneously for longs and just the opposite for shorts. To that end, we have included the our PHOENIX FUNDAMETAL RATING SYSTEM as part of our selection process. We use a composite of 5 different highly regarded fundamental rating systems that in general must all agree. We must get an A or B composite for longs and a D or F for shorts.
We try to focus almost exclusively on mid to large cap stocks that tend to be more conservative if we are selecting longs. Any shorts will typically have very poor fundamentals with poor long term prospects.
While this list is designed to be as diverse as possible, it is limited by a strict set of selection criteria that must be met.
The scans we are using are designed to find only the strongest trending stocks whether they be trending up for longs or down for shorts.
Each list is customized to provide the trader with the optimum mix of longs and shorts depending on the market condition. The Investor is never without very strong picks no matter what the market is doing. We are providing the Investor plenty of time to do their own research on the stock lists by posting them the first of every month. By sending out 20 different picks every month, we are giving the Investor plenty of options to pick from no matter when they join. The following is a list of the criteria we use to select our stocks for the HOT PICKS:
(1) Stock typically needs to be in a strong intermediate and long term uptrend for longs or in a strong intermediate and long term downtrend for shorts. (ideally greater than six months).
(2) The long term uptrend picks need to exhibit a consistent and steady growth accompanied by the appropriate consolidations and without erratic or excessive negative price swings. We want shorts that are collapsing with volume below major moving averages.
(3) The current stock price needs to be greater than $10 and the average daily volume greater than 250,000 shares.
(4) The stock price needs to be above the 200 DMA when selected for longs and below the 50 DMA for shorts (even better if below the 200 DMA).
(5) Both the 50 and 200 DMA need to be trending up for longs and trending down for shorts.
(6) The PHOENIX SYSTEM FUNDAMENTAL composite rating has to be an A or B at the time of the selection for longs and a D or F for shorts.
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