Action Zones provide investment opportunities
Investor’s Yak provides Action Zone Stock Lists
Action Zone Stocks represent companies with reasonably strong fundamentals which are further scrutinized using three (3) technical analysis strategies:
- 1st – Action Zone 1 (AZ #1) is a predictive or leading indicator represented by the Stochastic Oscillator.
- 2nd – Action Zone 2 (AZ #2) is a momentum strength indicator distinctive of the MACD.
- 3rd – Action Zone 3 (AZ #3) examines Price Characteristics including Pullback Price Support, Moving Averages, Bollinger Bands, and similar contributors to price stability.
Action Zone Figure 1
For detailed information on Action Zone Technical Indicators select the following links:
Advantages of Action Zone Stock Lists
Candidate companies are initially screened for strength using various Fundamental Analysis health metrics. The preliminary list is then further refined for Action Zone readiness by examining the Stochastic Oscillator for an entry trigger point. Typically, price increase begins when a stochastic trigger forms at a point illustrated by the “1st” notation of Action Zone Figure 1.
Price increase can be even stronger when the Moving Average Convergence/Divergence (MACD) is showing signs of leveling off. As price begins to increase in the early days following a stochastic trigger, the MACD generally turns upward setting up a trigger of its own. A typical MACD trigger follows the stochastic as shown by the “2nd” notation of Action Zone Figure 1.
Price characteristics indicate direction potential. Examine the “3rd” notation of Action Zone Figure 1 from pullback (stochastic trigger) through a seven (7) day run (ending at the MACD trigger). There are several price characteristic to analyze here.
- First, the price pullback during the stochastic trigger should coincide with prior price support.
- Second, if a stock’s price moves below the price support an exit sale should be performed (execute your stop loss).
- Third, when a stock’s price moves up to the MACD trigger, close the position to take a short term profit.
- Forth, price increases above the MACD trigger can be risky, but can also provide greater price increases.
The goal of the Action Zone listings are to provide a reduced list of quality stocks condensed into an easy to read arrangement. Fewer stocks to review equates to less loss of personal time and more freedom to spend on other activities.
However, Investor’s Yak is a self-help investment website. And as in every self-help endeavor, you must decide for yourself what you will do. Ultimately you are responsible for your own investment decisions. Even after all the upfront Action Zone screening is complete, risk of a loss is still a reality. And because there is always a risk of losing, you and I both are responsible for our own purchase decisions.