The S&P has been hovering around all-time high territory for the last few weeks, which means that lucrative trading opportunities are everywhere you turn.
But that doesn't mean you should just jump into the next trade you see.
The key is to identify the best of the best in this bullish market – and that's where you put your money.
But that's much easier said than done…
So today, I'm going to let you in on the market's best-kept secret – and show you exactly how to pinpoint your next big profit opportunity.
These S&P 500 "High Fliers" Could Hand You Your Next Triple-Digit Win
Newton's first physical law says: "An object in motion tends to stay in motion."
The trading world would say it this way: "The trend is your friend."
But here's the thing – that's not always the case. Like, for instance, when the motion or trend stops.
It can be tricky to determine when the end will be, which is why the best course is to use discrete technical conditions (e.g., moving averages, support/resistant, volume, etc.) that can help signal the end.
These laws also apply when stocks set an annual or multi-year high.
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Now, you've probably heard that entering a trade at an annual or multi-year high isn't the best – but truth be told, it is often the ideal time to jump in.
Here's the thing: institutions account for the bulk of trading activity. Stocks will go where they take them through varying levels of buying and selling enthusiasm. Institutions also use program trading with discrete price targets to accumulate and distribute stocks. It makes sense that if a stock reaches an annual or multi-year high, their intentions are to take it even higher.
This is why I love trading what many call the "high fliers."
To pinpoint these, I use a scanner to alert me when stocks reach annual or multi-year highs. Below is a recent list of the S&P 500 stocks that have reached an annual high:
Now, this list shows only 20 stocks, but there are a lot more with the S&P 500 reaching all-time highs recently.
You can see that the list shows the annual "High Price" and "Low Price," as well as the close price and where it lies in the annual range. All of these are at 100%, indicating that they just set an annual high. The first seven are at ALL-TIME HIGHS!
On top of this, you can increase the probability of continuing upside movement with basic technical analyses like support/resistance breaks, trend lines, and moving averages (MAs).
Talk a look at the CME Group Inc. (Nasdaq: CME) chart below:
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.