Cách giao dịch các cổ phiếu tăng trưởng: Tại sao nền giá hình chiếc cốc trên các cổ phiếu chiến thắng trong quá khứ là một kho báu thông tin

KEN SHREVE and DAVID SAITO-CHUNG

11:45 AM ET 09/24/2019

Waste Management and Storage Technology started big price moves in the late 1970s. Reebok and Compaq Computer did the same in the 1980s. Ditto for Cisco Systems, AOL, Yahoo and Microsoft in the 1990s. And Intuitive Surgical, Regeneron Pharmaceuticals, Apple, Biogen, Ulta Beauty, Lululemon and Celgene ruled in much of the past decade and a half.

Show someone a stock chart from prior decades, and the reaction usually goes something like this: “Why would I care about something that happened 30 or 40 years ago? Or even in the 2000s?”

Yet when it comes to making money in growth stocks, investors generally aren’t interested in looking in the rear-view mirror. They’re interested in what’s actionable now and which stocks have the best potential to make a breakout and deliver strong gains.

That’s understandable, but studying past charts of big winners will ensure you’re prepared when emerging leaders today break out from similar patterns.

Enlist History

The reality is that market history is a treasure trove of information. Decade after decade, history repeats itself.

Stock market tops are put in due to repeated signs of institutional selling. Market bottoms are put in when institutional investors start putting money to work. This is when many emerging leaders start big moves after staging strong breakouts from cup-with-handle and other key patterns.

Few knew much about U.K.-based chip designer ARM Holdings when it went public in April 1998. It cleared a first-stage base in June, then went on to form a second-stage cup-with-handle base. It cleared a two-week handle area in December and more than doubled over the next 12 months.

Did ARM form more bases? Yes.

After the stock market bottomed in March 2009, ARM kept working on the right side of a huge bottoming base. Shares eventually broke out, clearing a 6.80 buy point in a narrow flat base during the week ended Sept. 11 that year. (One could have viewed that flat base as a handle on a super-deep cup pattern, too.) A low share price indeed, but dollar volume exceeded $30 million that week. After numerous rebounds off the 10-week moving average, the stock eventually returned to a double-digit price.

ARM went on to rally 367% to a high of 31.81 in mid-February of 2011.

So where’s the best place to find breakouts from the bullish cup-with-handle pattern happening now?

How To Trade Stocks: Never Stop Searching

There’s no shortage of IBD screens, but here’s one powerful and easy-to-use tool: Leaderboard, a premium service at Investors.com.

Every day, senior IBD markets writers and editors scan the markets and IBD stock lists for actionable stocks with top fundamentals and bullish chart patterns consistent with past market winners.

Other IBD screens include Stocks On The Move on the home page of Investors.com, IPO Leaders, Sector Leaders, Big Cap 20 and the IBD 50, updated every day after the close.

A version of this column was first published on Oct. 1, 2013. Softbank acquired ARM in September 2016. Follow Shreve on Twitter at @IBD_KShreve and Chung at @IBD_Dchung for more on growth stocks and stock market insight.