When mutual funds and other professional investors start buying a stock, it represents heavy demand that tends to lift stock prices higher.

• Pay close attention to stocks with Accumulation/Distribution Ratings of A or B. C-rated stocks may be O.K.
• It is also desirable to see an increase in the number of mutual funds owning the stock over the past few quarters. It's even better if a stock shows up on the list of "New Buys" or "Largest Holdings" of top-performing mutual funds.
• Avoid low-priced stocks, which are typically shunned by institutional investors. Focus on NYSE stocks $20 or more and Nasdaq stocks $15 or more. These were the minimum price levels among most of the greatest stock market winners when they began their major moves.
   

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