Analytics Trading Lessons

How To Identify A Hot Stock

Written by Noah Hochman

I really want to get into the subject of “Hot Stocks” and have asked some of my close friends who are considered heavy hitters in the day trading arena to lend an occasional post, however it is a tricky subject so I thought some general beginners information on how to determine if a stock is or may maybe a hot pick, should be in order. Much of this information can be found in numerous fine books available on Amazon.com. Check the carousel at the bottom right of this page for some favorites, all of which I have either read or had a part in writing.

Finding a hot stock on your own is probably the best feeling you can get, knowing that you have beaten others to the punch by interpreting movements in the market and a particular stock before it hits the street. I was going from chart to chart on some of my favorite stocks and I noticed one was just sitting there at a mid support level when the volume spiked way above what I felt was normal for that stock, at that time of day. What got me thinking was that with the high volume the price didn’t rise as much as I felt it should have with such a spike.

With today’s technology, you can check for any news stories while still keeping vigil on the charts. The street was quiet in regards to this issue, which to my trained eye meant only one thing, someone or possibly an institutional trader was silently acquiring this stock! When you see such a occurrence such as high volume, no news and little price movement, keep an eye out as there is a possibility some news or rumors may have leaked out, and savvy traders or insiders are slowly accumulating this issue. You don’t necessarily need to buy this stock at that point, but be ready because there is a good chance the breakout is coming and when it does it moves like lightning!

Noah Hochman

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Noah Hochman

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