Home > Stocks
VIDEO: How To Identify a Good Opportunity In Stocks
Does the Elliott Wave Principle apply to individual stocks?"
One of the most frequent questions readers ask us is: "Does the Elliott Wave Principle apply to individual stocks?"
The answer to this question is always – yes, but with one important caveat: sufficient investor participation.
Penny stocks don't have enough players to accurately reflect a true mass psychology – so, understandably, they will rarely trace out consistent wave patterns. And even with large and mid-caps, investor participation often is not big enough to overpower outside influences – e.g., what the competition is doing, government policy, whether the CEO is having personal problems, etc.
There are lots of specific reasons why a single stock may be going up or down – besides the levels of investors' collective optimism or pessimism that Elliott wave analysis allows you to track and forecast. That's why a single stock won't always trace out patterns that are perfectly reflective of the Wave Principle.
How do you apply Elliott to an individual stock, then? Bob Prechter, Elliott Wave International 's founder and CEO, gives this simple advice: "Avoid trying to analyze each issue on an Elliott basis unless a clear, unmistakable wave pattern unfolds before your eyes and commands attention. Decisive action is best taken only then."
For a good example of this approach, watch this free video by Mike Boysen, EWI's Prime Stocks Flash service editor. Mike dissects his recent Flash recommendation for Intercontinental Exchange shares (NYSE:ICE) and explains how he picked that opportunity.
EWI's Prime Stocks Flash service brings you potential high-probability trading opportunities in U.S. stocks. And on June 26, Prime Stocks Flash editor Mike Boysen teams up with EWI's Senior Tutorial Instructor Wayne Gorman to bring you a live webinar, "How To Select and Trade Individual Stocks."
VIDEO: How To Identify a Good Opportunity In Stocks