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Each and every week I bring to you tech winners with great fundamentals.
However, perusing balance sheets and income statements isn't the only way to find great tech stocks to buy.
There's also the technique known as technical analysis.
In technical analysis, we study a stock's chart to figure out if it's about to soar, ready to plummet, or just treading water. And in my 30 years knocking around Silicon Valley, I've found that the stocks with the best charts tend to be small caps.
But not all stocks with eye-popping charts are risky small caps.
In fact, my charts have revealed two big-cap tech stocks with small-cap charts.
And today, I'm not only going to share these profit generators with you – I'm also going to give you a little DIY power by showing you how to decipher stock charts yourself…
Off the Charts
There's a reason why popular small caps can have such great charts – at least for a time. It's all about supply and demand.
Small caps, by definition, have fewer shares trading hands than big caps do. So, when investors jump into a trendy small cap because it has a hot new product out or a big bump in profits, the price rises quickly.
Big caps, on the other hand, have so many shares outstanding that even huge breakthroughs can have a muted impact on the stock price.
In our Sept. 22 conversation, I noted that underperforming small caps are the main reason the tech-centric Nasdaq Composite Index has recently fallen out of favor.
While that may be true, we usually focus on bigger tech companies at Strategic Tech Investor, and I've uncovered several that are showing excellent technicals.
I've been fascinated with the visual display of data since just about forever. While I was earning my honors economics degree, I spent many, many hours drilling deep into supply and demand curves.
That background gave me the expertise I needed to create my own unique charting process. I call it the Real Demand Tracking System. As its name suggests, my system tells me about the real demand for a stock over any period I want to measure.
I use my Real Demand Tracking System regularly to help me find winning stocks for my premium trading service, Radical Technology Profits. While I subscribe to a professional charting service, I heavily customize it to improve my odds of finding big winners.
Today, however, I'm going to simplify technical analysis and use the free tools available at Yahoo! Finance. It's a fast and easy way to check a stock's chart action.
And remember, we're going backward today.
First, we're going to look at the chart. Then, we'll examine the fundamentals driving the stock. Finally, I'll show you how you can create these same charts yourself.
Let's get started…
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.