I’m very much a novice when it comes to charting and studying stock price indicators.
So when doing my due diligence of a stock, I tend to do a few quick checks before delving too deeply into the fundamentals of a company.
One check that I do is to review the stocks ratings on a very useful site called barchart.com.
This site provides an assessment of a stocks performance and gives it a rating on a number of indicators.
For example, before I bought Andromeda Metals (ADN) at 16c per share, I checked how the indicators looked via this website. Even now, the indicators suggest that this stock is still a strong buy and that’s after the share price has risen to 29c as of today.
Another company that I sold recently is Core Lithium (CXO). I sold out of this company after the share price rose 50% in a single day. In hindsight, which is always nice, I should have hung on for a bit longer. But in reality I have no right to complain after an almost 100% profit from the sale of this stock.
What is interesting though, is that CXO is still displaying a strong buy signal according to barchart.com. And after some further review, I can see that we may very well see this stock heading towards a much higher price in the medium term. And this has lead me to keep this company on my watch list for a good re-entry point.
Reading this might suggest that the website simply tells you to buy any share. So I’ll provide an example of a company that I really want to buy into but just consistently under performs. Carnaby Resources (CNB) is a gold explorer turning gold producer and, from a fundamental point of view, looks like a great buy at the current price.
The share price performance however, is very uninspiring. On some days we see some significant movement. But the following day the price will drop like a hammer, taking any potential profit with it. And barchart.com gives a rating which reflects this shocking performance with a 32% buy rating.
So, while you certainly shouldn’t rely on this website as a way to determine whether or not you should buy into a company, it does give a decent indication as to how a share may perform. So it’s a useful tool to have in your toolkit.
Happy investing!
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