What is a Stock Base?
If you want to be a successful investor, you must know how to take advantage of stock bases:
Stock bases are areas of price consolidation which create pivot points, or launch pads. If you want to master timing the market, then you MUST master base finding.
Not just base finding, but proper base finding. There are many types of bases, and each one has its own definition, but in general a base is this: after a stock makes a strong move upwards, it will naturally go through a small correction (come down in price) as people sell out and take their profits. This natural correction in the stock brings its price down a little bit, but the stock will find support at a certain level. In a strong base, the stock is unlikely to drop below this support level. If the stock is unlikely to drop below this support level, then it is preparing itself to continue its upward trend. This is the golden moment for investors - learn to find it and profit from it. As you learn more about bases you will be able to spot the strong bases vs. the faulty bases and learn when and where to put your money.
You can find the perfect stock, but if you buy it at the wrong time then you can lose money. Timing is KEY. It is all about being in the right place at the right time. The right stock is a high quality one found using IBD's research and screening tools and the right time would be during the base building stages, or preferably immediately after the stock successfully breaks out of its base (it has launched from the launch pad).
I can go on and on about how important bases are to your investment success and give you hundreds of perfect textbook examples of the biggest stock winners of all time that have broken out of bases and tripled in price, but there is already an entire book devoted to this successfully proven strategy:
If you truly want to master the market then that will be your "investment bible." As I have said before, buying the right investment books will be, by far, the BEST investment you will ever make. Trust me.
My "Investment Bible"
Speaking of "Investment Bibles" here is my personal favorite. After reading the book mentioned above you will have a strong understanding of how the market works and how to profit from it. After that, the following book listed below will truly act as your reference guide to the market:
Think of this book as your "study guide" or "cheat sheet" and go profit from the great opportunities that our country presents to us every single day in the market ;)