{"id":21724,"date":"2025-10-12T14:37:59","date_gmt":"2025-10-12T14:37:59","guid":{"rendered":"https:\/\/finderica.com\/?p=21724"},"modified":"2025-10-12T14:37:59","modified_gmt":"2025-10-12T14:37:59","slug":"3-signals-that-a-stock-is-a-buy","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=21724","title":{"rendered":"3 Signals That a Stock Is a \u201cBuy\u201d"},"content":{"rendered":"
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Editor\u2019s Note:<\/strong> Over the past few weeks, I featured a couple of articles from Monument Traders Alliance\u2019s Bryan Bottarelli about the significance of the Fed\u2019s September meeting and how he\u2019s planning to capitalize on the central bank\u2019s interest rate cut.<\/p>\n

Today, Bryan answers one question that every investor is constantly wondering: \u201cHow can I decide which stocks to buy?\u201d<\/p>\n

To learn more about Bryan and his team\u2019s mission at MTA, check out their website here<\/a>.<\/p>\n

\u2013 James Ogletree, Senior Managing Editor<\/p>\n

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One of the most common questions I get as a trader is\u2026<\/p>\n

\u201cHow do I know which company to trade?\u201d<\/p>\n

The truth is\u2026<\/p>\n

There are thousands of tickers out there, and it\u2019s easy to get overwhelmed.<\/p>\n

You\u2019ve also got fear-based news headlines and social media hype hitting you on your smartphone and computer all day.<\/p>\n

Overall, it can be difficult to know which strategies will actually lead to consistent gains.<\/p>\n

But over my 20+ years as a trader, I\u2019ve developed some tried-and-true methods for finding the best buy opportunities.<\/p>\n

Here are 3 key factors I look for before trading a company.<\/p>\n

Use these and watch your trading confidence skyrocket.<\/p>\n

No. 1 \u2013 Notice the product in the real world<\/strong><\/p>\n

The first thing I look for when trading a stock is real world value.<\/p>\n

For example, say I\u2019m at a coffee shop, and I notice a lot of people wearing a certain kind of shoe.<\/p>\n

That\u2019s a strong buy signal because that company has demand.<\/p>\n

This is especially true with women\u2019s spending trends.<\/p>\n

Women make up 70-85% of household purchases, so noticing what women are buying is one of my staple strategies for finding companies worth trading.<\/p>\n

Start looking for these consumer trends and you\u2019ll be ahead of 90% of other traders.<\/p>\n

No. 2 \u2013 Look for an upcoming catalyst<\/strong><\/p>\n

A catalyst is a known date\/event that could determine whether the market is bullish or bearish on a company.<\/p>\n

These catalyst events include quarterly earnings reports, product launches, mergers, buyouts, ETF inclusion, and FDA approvals.<\/p>\n

Before these events happen, you\u2019ll often see traders buying, shorting or hedging a stock.<\/p>\n

Then, the market digests the outcome and a stock either spikes or falls.<\/p>\n

Keep in mind \u2013 this is not about guessing what\u2019s going to happen to a stock ahead of earnings. However, when you\u2019re aware of these events \u2013 you can position yourself in a way that increases your likelihood of a winning trade.<\/p>\n

No. 3 \u2013 See if the company has strong institutional backing<\/strong><\/p>\n

Another factor I look for is institutional backing.<\/p>\n

Institutional backing is when big players \u2013 mutual funds, hedge funds, pension funds \u2013 all put serious money behind a stock and hold it in size.<\/p>\n

For example, before tech group Nvidia\u2019s big run in 2023, it had whale funds like ARK Invest, Fidelity and BlackRock all with large positions.<\/p>\n

This institutional capital acts as a liquidity base (price support) and a confidence signal for other funds.<\/p>\n

Another term traders should get familiar with is \u201cSupply burn.\u201d<\/p>\n

Supply burn is when the available float (shares that are available to trade) gets reduced or locked up.<\/p>\n

For example, say company insiders use their own profits to buy shares of a company (also known as buybacks).<\/p>\n

By doing this, they destroy the supply because the number of shares available to the public shrinks.<\/p>\n

With low supply, this creates a squeeze effect where any catalyst (like earnings) could ignite major momentum.<\/p>\n

Think of float like the kindling\u2026 and the catalyst is the spark that could light up a stock.<\/p>\n<\/p><\/div>\n