Great question, and props for being the first one to ask...
Let me make this clear, I will refer to small-large cap stocks as stocks, and Micro cap & anything on the OTC or Pinksheets as pennies...
Well for stocks that are bottoming out and potentially bouncing you have to do some research. If the stock announced news and went up $1, but the next couple of days pulls back, that is fine, since the decline was on no significant news, just a little bit of profit taking, you can assume it is only a pullback. Many investors believe in a 50% retracement rule, saying that a stock will likely retrace 50% of its gain, so if a stock goes up by $10, it may pull back down $5 before it moves up again. Now this is not factually proven, but is accepted, and I believe it is a self-fulfilling prophecy because lots of people believe in it.
When you are looking for a stock to bounce, try to figure out why it is selling off, and if the reason is valid, and if it justifies the movement. The market tends to panic and run for the doors, a lot of the time it is an overreaction, for example look at Apple's earnings for Q3, and how the stock went down. But be careful, as sometimes it is just the first wave, look at CD.
BUYING OPPORTUNITY: A very good buying opportunity is when a sector does poorly. For example, when Refco was going through their scandal, you could have bought Goldman Sachs (which was on the discount isle because of refco) for $110.
In the same sense, the above can be a great selling opportunity, when the market does really well, it may be a good time to sell some of the losers.
I use the most basic of TA, nothing to complicated, because I think fundamentals are a much stronger means to judge a company, and Technicians are usually blind when it comes to the stock price, all they see is MACD convergence and RSI movement, which is great, dont get me wrong, but if you ignore the companies fundamentals, its like using the best navigation equipment on a REALLY BAD ship, your equipment cant stop you from crashing, and wont help your ship sail a certain way...
Read the TEACH ME TECHNICAL ANALYSIS thread in the Stock Market University Forum, great start, and I think SJ does a good job explaining.
TA works great, dont get me wrong. It can tell you everything you need to know about the activity and movement of a stock.
I personally don't use filters. I look for stocks based on upcoming events (earnings, splits, meetings, economic news, ect.)
A great website for market calenders (Earnings, Economic, Splits, and other Events)
http://moneycentral.msn.com/investor...t/earncalendar
What you have to remember with stocks vs pennies, is that stocks move in sectors, people say 25% of a stocks movement is its sector. They also move with the market, most good stocks do well on days the market does well, unless their sector does bad, or they have bad news.
Just read, is the big thing, look at PR's, read articles, look at different recommendations on the stock, read research reports by analysts (but use them only as an opinion, not the determining factor)
If you read, look at the past and see how the stocks price changed with news, and apply some TA with basic TA. You will be in good shape.
ALSO IF I MAY SAY SO ONE OF THE BEST PLACES TO LOOK FOR STOCKS IS.... HSM!
