• Use charts to improve your timing so you'll buy at the time where probability of an up move is greatest. If you buy exactly right, few of your stocks will decline 7% - 8% below your cost.
• Always sell all of a stock that has a climax top (where the stock has advanced for many months and suddenly races up for one or two weeks much faster than any prior one- or two-week period or since the beginning of the stock's long move up). This occurred in most market leaders in March and April 2000.
• Sell when your stock exceeds an upper channel line drawn across three price peaks over a period of many months on a weekly chart (available on investors.com).
• Sell most stocks breaking out of a third- or fourth-stage base on the way up in price.
• Sell if a stock has a long advance and drops below its 10-week moving average line and stays below the line for many weeks, unable to rally.
• Recognize persistent, heavy volume on the downside and analyze to see if the stock is under major liquidation and needs to be sold.

Related Resources:

Review IBD's 20 Rules For Stock Market Success.

Go to the Investor's Corner Archives to read IBD's "editor picks" of classic Investor's Corner columns.

Search our archive of Ask Bill O'Neil Q & A's organized by topic.