Buying Strong Stock When the Overall Market is "Way Down"...Thoughts?

Discussion in 'Trading' started by acroreef, Aug 19, 2016.

  1. acroreef


    Dear Folks,

    I was wondering regarding your thoughts about buying a strong stock when it falls in price because the overall market has driven the price of most stocks down, unrelated to that specific stock. The assumption is that the specific stock would recover because it was unrelated to the larger picture, so to speak. Maybe a steep fall over 2-3 days, which is a fairly infrequent occurrence. If this is a viable strategy, how much would the overall market have to fall to get a "good price?" How does one find good candidate stocks assuming this may be a viable strategy? Looking for a "swing trade" of between weeks and months.

    Thank you in advance to all who respond. Any suggestions, comments, or additional resources are greatly appreciated.

  2. I preder to buy strong stock in a strong market, but that's just me :D
    Handle123 likes this.
  3. i960


    Sounds like someone's looking to buy AMD.:D
    Sergio77 likes this.
  4. Turveyd


    Its what i used to do nearly 20 years ago, used to do well, obviously if market has mote bad days it will drag it lower, just buy more then.
  5. GotherL


    I don't think that's a good strategy because a strong stock isn't gonna fall much anyways in a bear market unless your talking about 9/11. There are much better strategies for roi that are more consistent.
  6. Well, there are certain sectors of the market that are considered to be defensive sectors. Meaning that investors typically run to those sectors when the market is in a downtrend. Likewise, when you see a stock that is unwilling to fall with the rest of the market, that's very telling.
  7. d08


    As if strong stocks are obvious before the fact. There aren't that many market wide moves when everything goes down. Also, I'm sure many did that in 2008 and will never trade again.
    Handle123 and Xela like this.
  8. newwurldmn


    I think it's a great strategy if your holding periods are long enough.
  9. zdreg


    don't try to catch a falling knife. ( particularly for a"swing trade of between weeks and months")
    Handle123 likes this.
  10. GotherL


    I use to do this as well. I think it's a novice strategy. Not saying bad, but the very 1st strategy that comes to mind. But instead of using strong stocks I use the technique to identify them. Example, if Nasdaq down 200 points and a stock hasn't decline on any news, than that was considered strong to me.
    #10     Aug 20, 2016
    Handle123 likes this.