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technical analysis Archives

What is technical analysis?

The technical analysis of a stock can be a powerful tool to help investors identify trend reversals and entry and exit points.

As you read Cabot newsletters and listen to investing news, you will probably hear technical analysis terms like ‘head-and-shoulders pattern,’ ‘trendline,’ ‘support and resistance,’ ‘double top’ or ‘double bottom,’ “triangle,’ and ‘gap.’ These are all different trading and movement patterns, and understanding them can be the difference between a successful and a failed investment.

Learning about these basic formations and how to read stock charts will make you a better, more profitable investor. Even a basic understanding of these charts can significantly improve your investing results. How does it work?

Technical analysis focuses on the price and volume activity of a stock. In its purest form, technical analysis assumes that all the fundamental factors of a company are reflected in the price of its stock. Technical analysis studies the market supply and demand in an attempt to identify where a stock’s price will go in the future.

By contrast, fundamental analysis involves analyzing the characteristics of a company to estimate its value. This includes examining a company’s financial statements and financial health, its management and competitive advantages, and its competitors and markets.

The key is to use technical and fundamental analysis together. A great chart is nice to look at, but the company may not be worth investing in unless it also has a terrific long-term growth story. Likewise, a company may have a terrific fundamental story, but its chart (which is really what you’re buying) may not look so good.

Only if both the technical and fundamental analysis looks outstanding should you consider a stock for purchase. 

To learn more, download our FREE report, Technical Analysis of Stocks: How Relative Performance Works, Why Trading Volume is Important, and Other Chart-Reading Lessons. 

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Cabot Marijuana Investor Update

January 20, 2021|From Cabot Marijuana Investor|by Timothy Lutts|Growth Stocks

Over the long run, the S&P 500 has produced an average annual return of about 10% per year. Our aim at Cabot, through our various services, is to do better, and in the long run we do.
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Cabot Undervalued Stocks Advisor Weekly Update

January 20, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

As value investors in a remarkably robust (exuberant) stock market, full valuation impels us to want to sell a stock. Such is the case with General Motors. On most conventional metrics, the stock is fairly priced. Through the courtesy of several friends, we’ve some...
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Cabot Profit Booster 158

From the Cabot Profit Booster 158 issue of Cabot Profit Booster|by Jacob Mintz|Options Trading

January was another good month for the Cabot Profit Booster portfolio as we closed our two positions for profits:
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Cabot Stock of the Week 331

From the Cabot Stock of the Week 331 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

Overall, the market remains very healthy. Yes, sentiment is a bit high, and yes, valuations are a bit high, but I learned long ago not to fight the trend.
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Cabot Prime Week Ending January 15, 2021

From the Cabot Prime Week Ending January 15, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Cabot Prime Pro Week Ending January 15, 2021

From the Cabot Prime Pro Week Ending January 15, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

2 Very Undervalued Stocks for 2021

2 Very Undervalued Stocks for 2021

From the issue of |by Nancy Zambell|Value Investing

With markets trading at all-time highs it can be tough to find undervalued stocks with growth potential. Here are two that fit the bill.
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Cabot Growth Investor 1463

From the Cabot Growth Investor 1463 issue of Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Taking Things on a Stock-by-Stock Basis We believe one of the main reasons our system has proved durable is that it doesn’t focus on just one or two factors, but incorporates things from different angles. For instance, when selecting stocks, we’re not only looking charts...
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Cabot Small-Cap Confidential Weekly Update

January 14, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

As we near the end of the second week of 2021 and approach inauguration day, the market is barreling full steam ahead, seemingly unaware of the dung piles that are consistently thrown in its path.
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Cabot Marijuana Investor Update

January 13, 2021|From Cabot Marijuana Investor|by Timothy Lutts|Growth Stocks

Part of the marijuana sector’s strength, of course, is because the broad market is also trending higher. But a substantial part comes from the growing realization, especially in wake of last week’s election that promised us a uniformly Democratic federal government, that this will...
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Cabot Undervalued Stocks Advisor Weekly Update

January 13, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

Most stocks on the Cabot Undervalued Stocks Advisor recommended list had strong performance this past week. Part of the strength was perhaps due to money managers’ general optimism that seems to brighten with turn of the calendar. With last year’s bonuses firmly in bag,...
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Cabot Dividend Investor 121

From the Cabot Dividend Investor 121 issue of Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

A Goliath of the Dawning Digital Age Are you sick of hearing about the virus and the election? I know I am. But there’s good news. As hard as it may be to believe, these current obsessions will fade away, and soon. As the from...
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Cabot Profit Booster 157

From the Cabot Profit Booster 157 issue of Cabot Profit Booster|by Jacob Mintz|Options Trading

This week, Cabot Profit Booster features a top new-economy recommendation in the fast-growing social media space whose stock is just short of its all-time high.
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Cabot Stock of the Week 330

From the Cabot Stock of the Week 330 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

The first week of the year saw buyers dominate, pushing the major indexes to higher heights on most days. Thus the major uptrend is intact, but extended, which means this is probably not the best time to buy an aggressive growth stock.
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Cabot Prime Pro Week Ending January 8, 2021

From the Cabot Prime Pro Week Ending January 8, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Prime Week Ending January 8, 2021

From the Cabot Prime Week Ending January 8, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Marijuana Investor Update

January 6, 2021|From Cabot Marijuana Investor|by Timothy Lutts|Growth Stocks

Marijuana stocks exploded higher this morning as investors speculated that the solid Democratic federal government resulting from yesterday’s Georgia election would be favorable to this fast-growing industry.
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Cabot Undervalued Stocks Advisor 121

From the Cabot Undervalued Stocks Advisor 121 issue of Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

Sometimes the most appealing stocks are those that superficially seem to go against trends (leading to investors avoiding them) yet have either fundamental traits that sidestep these trends or have overly discounted valuations.
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Cabot Profit Booster 156

From the Cabot Profit Booster 156 issue of Cabot Profit Booster|by Jacob Mintz|Options Trading

The Cabot Profit Booster portfolio had a spectacular 2020, aided by great stock picks from Cabot Top Ten Trader Chief Analyst Mike Cintolo, “juicy” call premiums which we sold via our covered call strategy, and a generally strong market. Now that the calendar has flipped to 2021, will...
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Cabot Stock of the Week 329

From the Cabot Stock of the Week 329 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

After closing out 2020 with a bang, delivering profits that were inconceivable in the depths of the March selloff, the broad market turned down today.
Read More

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