Momentum Rider Trading: January 2012

Monday, January 30, 2012

Top Value Stocks for 2012 - Coal Stocks and Steel Stocks

Top Value Stocks

The Momentum Rider investor series continues as we take a look at the coming week's action and also more areas to look for to find top value stocks. This week is going to be focsuing on the coal stocks and also in steel stocks. They were sold off in a very big way in 2011 and many of them offer excellent values for longer term investors. As the world economies start to heat up and if China continues its bounce, they should do very well in the next 12 to 18 months from the current price levels.

As for the coming week, it is full of news and market moving events. The Greek government is still trying to work out an important agreement with its private sector creditors in the next few days. This issue is still very important to finalize for short term market stability and it was not resolved during this writing on Sunday night.

The markets finished up flat for last week which was positive for a sustained uptrend. The recent run up needed to rebuild some energy and work off some of its overbought state. The DJIA is consolidating near its 2011 highs and the S&P 500 still has 50+ points left to do an official retest of its May 2011 highs.

The short term technical indicators are still showing a very extended market that needs a pullback. But the buyers are keeping the markets grinding higher and the uptrend intact for now. A finalized Greek agreement would probably give us an early boost. And the Chinese manufacturing data on Wednesday will also be important this week. China needs to continue its move up to keep the other world markets, especially the commodities market, pushing higher.

The Fed’s announcement of keeping low rates through the end of 2014 was viewed as bullish for the markets and positive for precious metals. That is one reason why gold and silver are breaking out of their downtrends. (See our blog posted earlier today on Top Precious Metal Investments to take advantage of this announcement).

The US GDP growth reported late last week was disappointing at a mere 2.8% and some even complained that it was artificially high – making it actually lower. Obviously, this slower growth could fuel more speculation that the Fed still may use a QE3 program later in 2012 if Europe gets measurably worse. There is a jobs’ report coming out on Friday. Without the holiday hires, the number could disappoint. There will also be ISM Manufacturing and monthly auto sales on Wednesday and chain store retail sales on Thursday. Investors are hoping for positively trending numbers.

We are closely watching Exxon Mobil and US Steel earnings on Tuesday and MasterCard and Pulte Group on Thursday. Energy, steel, consumer spending, and housing are key areas to look at going forward. So far, 37% of the S&P 500 companies have reported and only 59% have beaten estimates. That is compared with 70%+ in the most recent quarters. Not as bad as many anticipated but probably a C+ score.

As for Europe, MR has been encouraged by the new lending facility to European banks that was implemented late last year. It has calmed the markets down and is one of the key reasons for the strong move up in the last 45 days. Also, it was positive news this weekend that Christine Lagarde, the head of the IMF (International Monetary Fund) was trying to increase the IMF’s resources by $500 billion. Largarde argued that increasing the size of the IMF’s resources would help improve confidence in the global financial system and we completely agree. The increased funding process will be monitored and no commitments were made. European Union leaders will sign off on a permanent rescue fund for the euro zone at a summit tomorrow and are expected to agree on a balanced budget rule in national legislation.

The markets have come a long way from the end of November and in the last 45 days. The technicals are very extended and a 2 to 3% pullback would be healthy. The question is whether a bigger pullback comes before testing the highs first or not. That is a difficult call at this point. The first important support on the S&P 500 is at 1300 and the next support is at 1285.

Finally, Facebook is expected to do their filing for an IPO this week. It is widely anticipated to be one of the biggest IPO’s ever with close to $100B valuation.

Using the Power Stocks Table:
(1) Risk: Conservative (Cons); Moderate (Mod); Aggressive (Aggr); Speculative (Spec)
(2) Stop: Typically use a 3 to 4% closing stop below the entry price
(3) Trailing Stops: Use the 10 EMA (Swing) or 20 SMA (Short Term Trader) for protecting gains once above it; SMA = Daily Simple Moving Avg; EMA = Daily Exponential Moving Avg.

Top Value Stocks to Buy for 2012 - Coal Stocks and Steel Stocks

Our focus for this week will be beaten down coal and steel stocks. As we have detailed in previous blogs this year, the Chinese market weakness last year significantly hurt commodity stocks. MR believes the selling was overdone and we recommended many of these stocks before the start of the year. And most have had strong moves already in 2012.

However, if China can continue its market uptrend and Europe's politicians can keep navigating through their minefields safely, many of these stocks could have much higher to go this year.

Keep an eye on China and Europe for traders and look to buy pullbacks. But investors can start scaling in on weakness into these top value stocks near these prices, especially with a longer time horizon of 12 months or more. True valuations are difficult to determine but we have included the forward PE ratios and reported Price-to-Book ratios in our chart. All of these top value stocks are good but our very best stocks to buy are highlighted.

Top Value Stocks for 2012 - Coal Stocks and Steel Stocks:

Investor Notes:

Investors should look at our recently posted blogs on top value stocks in energy and precious metal mining stocks. Both areas look ready to rebound after going sideways or finishing up long downtrends. Many of the precious metal mining stocks had big reversal moves recently. The top gold and silver stocks and ETFs were in a blog today on our website. (Click here to read it).

Stay tuned for some blogs to come on China's market and their top value stocks. Also, look for a very important blog later in the week on US Treasuries. A very safe investment will be revealed and it is not what you think.

Check out our newest FREE promotional offer called the MR Market Crusher Pack for 2012 (click link). It includes 5 very valuable investor products worth $600 to get you started with a bang in 2012 for your retirement account.

Another exciting pack for our subscribers and new customers is our MR Power Income Pack for 2012 (click link). It has 5 high income and retirement products worth $400 with some unbelievable dividend stock picks with both value and good growth.

To find out more about why our subscription services continue to crush the market since we started in 2004, go to www.momentumrider.com.

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_________________________________________________________

Good luck in your trading and investing,

Keith Hugenberg

CEO Jalexa Trading Consultants, LLC

________________________________________________________________

This BLOG POST is brought to you by the publishers at Jalexa Trading Consultants, L.L.C. Nothing in this post should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. Any investments recommended in this blog post or through any of its advertisements should be made only after consulting with your investment professionals and only after reviewing the financial statements of the company or investment.

© 2012 Jalexa Trading Consultants, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the internet), in whole or in part, is strictly prohibited without the express written permission of Jalexa Trading Consultants, LLC.

Top Gold Stocks and Silver Stocks to Buy Now

Silver and gold prices and gold stocks and silver stocks are ready for a new uptrend. The gold and silver prices both broke out of their downtrends of 5 months last week. The recent Fed announcement to keep rates low through 2014 was viewed as bullish news for precious metals. This news created a technical breakout that could gain more momentum in the next few months and the rest of 2012. In addition, the gold stocks and silver stocks also saw big price and volume days on the Fed news. This article will look at reasons for more upside pressure for both traders and investors. Finally, Momentum Rider will provide their top mining gold stocks and silver stocks to take advantage of this new uptrend. We will be following up with one more blog on the top junior mining stocks and the speculative gold and silver mining stocks.

Gold Technical Breakout From Downtrend:

Gold Price Breakout

Silver Technical Breakout From Downtrend:

Silver Price Breakout

Precious metals for numerous reasons will have upward price pressure for the next few years and beyond. This report focuses more on silver for getting the larger return of the two metals but gold will see strong appreciation as well. MR would expect gold to see at least a 50% increase and to possibly exceed $3,000/oz in the next 5 to 10 years. We believe silver may even see a double from the current levels.

Specifically, MR expects silver to exceed $60/oz over the 3 to 5 years and $100/oz in the next 7 to 10 years. The following five reasons explain the upward pressures pushing both metals, but especially silver, much higher in the future.

Reason #1: Silver is used in coin money and is acting more like a real currency.
Silver has been used in coins for thousands of years. Both the sales of Silver Eagle Bullion coins and the general coin fabrication as measured in millions of ounces of silver has been growing exponentially since 2006. Further upward pressure from both collectors and those using silver in coin fabrication will continue.

Reason #2: Silver is very cheap at its current $32 level based on both an inflation adjusted basis as well as measured by the Gold to Silver Ratio.

Remember that silver reached over $90 in the 1980’s on an inflation adjusted basis. Furthermore, silver measured against the historic Gold to Silver Ratio (GS) is significantly undervalued. The typical GS ratio in modern times has been about 15. The ratio right now in late January, 2012 ($32/oz silver and $1720/oz of gold) is about 54. We also know that silver will do the majority of the price movement to close this ratio based on its higher beta.

So it is not out of the question, as both silver and gold move up in price, that silver could hit $60/ounce or even $100/ounce over the next 5 to 10 years. For example, $2500/oz for gold would put silver at $167/oz to get a 15 GS ratio. It is also worth noting that since gold’s peak in 1980, gold's up only 65%, while inflation is up 175% and stocks have gained 900%. So there's plenty of room for both gold and silver to move up.

Reason #3: The silver supply is actually disappearing much faster than gold as it is actually used in industrial applications. Some would argue that it will become even more scarce than gold in the future.
Unlike gold that is stockpiled by countries and also preserved in jewelry, etc., silver is not and it is also used extensively in industrial applications for electronics. That means that a large amount of silver is being heavily used and then discarded and not being safeguarded or preserved. So the supply is quickly vanishing and the industrial uses remove that supply forever unless it is somehow recycled. That is not the current practice with expiring and older electronics. They are moved to the trash heaps of the world.

Reason #4: Silver is moving off the open markets at a very fast rate and into the hands of private investors which reduces the available supply.

The open market or public supply of silver is dwindling at an alarmingly fast rate. Even the US government has a difficult time finding silver to use for making coins. A recent estimate shows declines from 1800 million ounces of silver in the open market in the early 1990’s to what is now about 600 million ounces of silver available. In addition, there are estimates that private investors now hold over 90% of the world supply of silver which could even increase.

Reason #5: Inflation will become a huge issue in the next few years and beyond. This will put significant upside pressure on both silver and gold as it did in the late 1970’s and 1980’s. This reason alone supports a minimum move of gold to over $2,500 and silver to over $60 and ounce once inflation starts kicking in.
With the Fed’s constant printing presses and with their recent decisions, huge inflation is only a matter of time. And when the economies get a stronger recovery, it will be hard to stop.

MR will reveal five more reasons in our second blog in the series along with more picks in the gold and silver mining area. For now, here are the top picks for the larger gold and silver miners. We have highlighted some of our best picks in yellow.

Top Stocks to Buy Now for 2012 - Best Mining Gold Stocks and Silver Stocks:

Best Gold Mining Stocks and Silver Mining Stocks

Other ways to play this uptrend move in the gold and silver prices is with ETFs that track the real asset prices. Here are the top ETFs for investing in the underlying prices and avoiding the individual risk of mining companies. Remember, mining companies can be shut down with flooding, strikes, cave-ins, etc. They carry more risk than the ETF’s following the asset price. Also, an ETF basket of Gold Miners minimizes the individual company risk as well (see GDX).

Gold ETFs: GLD, IAU, SGOL, DGP (2X), UGL (2X); Silver ETFs: SLV, SIVR, AGQ (2X)

Gold Miners ETFs: GDX, GGGG, GLDX, PSAU, GDXJ (Jr. Miners); Silver Miners ETF: SIL

Gold and Silver Price Mix ETF: DBP

Precious Metal Basket (Gold, Silver, Platinum, Palladium) ETF: GLTR

To find out more about why our subscription services continue to crush the market since we started in 2004, go to www.momentumrider.com.

_________________________________________________________

Good luck in your trading and investing,

Keith Hugenberg

CEO Jalexa Trading Consultants, LLC

www.momentumrider.com

________________________________________________________________

This BLOG POST is brought to you by the publishers at Jalexa Trading Consultants, L.L.C. Nothing in this post should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. Any investments recommended in this blog post or through any of its advertisements should be made only after consulting with your investment professionals and only after reviewing the financial statements of the company or investment.
© 2012 Jalexa Trading Consultants, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the internet), in whole or in part, is strictly prohibited without the express written permission of Jalexa Trading Consultants, LLC.

Saturday, January 28, 2012

Top Energy Stocks - Oil and Gas Independents and Oil Refining Stocks

Many energy stocks are trading at very attractive valuations as this article is written. MR believes this is the right time to start scaling into these stocks and ETFs if you haven't done so already. And, even though these stocks could still pull back from these levels, the patient investor will be rewarded. Investors should take advantage of the low prices in our recommended stocks list. Furthermore, this article details two more strong reasons that energy stocks and energy ETFs will be good long term investments beyond 2012. This is part 3 of a 4 part blog series.

This article will add to more reasons to invest money in energy stocks and energy ETFs and details support for upward price pressures going forward for years to come.

Reason #7: The fast growth of the emerging market middle classes and their huge demand for commodities to support infrastructure growth will put enormous upwards pressure on commodity prices across the board, including oil, coal, gas, and all refined products.

MR has previously written about the growing middle classes in the emerging market countries like China and India. The strong growth and large population numbers are putting huge demand pressure on all commodities for transport, jewelry, infrastructure for businesses and residences, agriculture commodity related products, etc. This increasing and high demand worldwide for commodities in general will push energy prices up along for the ride.

Remember, when those steep rises in commodity prices occurred in the 1970’s and early 1980’s, there was basically very little demand coming out of emerging markets. In particular, there was a worldwide population of about 1 billion and now it is over 6 billion. That is 6X the demand assuming it was only a linear demand curve. Based on the new world, we would argue that the demand is not equal to what it was per capita back then but actually significantly more. It is clear that the parabolic move up when inflation starts rearing its ugly head could make the 1970’s rise in commodity prices pale in comparison.

Reason #8: The valuations of numerous energy stocks are very compelling at current levels. This is especially true when MR factors in earnings that we believe will accelerate faster than most analysts are predicting when oil and gas prices start rising in 2012.

Even if one uses the current projections of a very modest increase in oil and gas prices as well as the conservative estimates on earnings, the valuations of oil and gas independent stocks and the oil refining stocks are very attractive at these price levels.

The following chart lists our favorite picks in these two key investment areas.

Top Oil & Gas Stocks Independents and Oil Refining Stocks:

Top Oil and Gas Independents and Oil Refiners

Top Oil and Gas Independents and Oil Refiners

** Note: MR wants to point out that we previously included many strong natural gas independent stocks in a previous blog and we will not repeat them here.

Take partial positions after the next pullback in the market which should happen in the next few days and probably some next week. Add to your position on 5% drops (if they ever occur) to build out your investment position. Our best picks are highlighted in yellow.

Friday, January 27, 2012

Top Major Integrated Oil & Gas Companies

Many energy stocks are trading at very attractive valuations as this article is written. MR believes this is the right time to start scaling into these stocks and ETFs if you haven't done so already. And, even though these stocks could still pull back from these levels, the patient investor will be rewarded. Investors should take advantage of the low prices in our recommended stocks list. Furthermore, this article details two more strong reasons that energy stocks and energy ETFs will be good long term investments beyond 2012. This is part 2 of a 4 part blog series.

Crude oil, natural gas, coal, and refined oil products, like unleaded gas, will continue to be used extensively in the future. And while there currently is a significant large storage inventory and oversupply of all of these energy sources in today’s economic environment, the demand and supply curve is starting to shift as the world recovers. The time to invest is before that coming big demand shift happens quickly and everyone sees the recovery occurring.

Crude oil and coal are still the work horses of the energy world and that won’t change anytime soon. Furthermore, the higher demand that will be placed on these energy sources coupled with the explosive driving middle class in China and other emerging markets will put huge pressures on refined liquid gas products. We all know that inflation is coming in the next few years if not sooner.

Even during the 1970’s and early 1980’s when inflation was raging and the general stock market was falling, energy related stocks made strong gains.

This article will add to more reasons to invest money in energy stocks and energy ETFs and details support for upward price pressures going forward for years to come. Our next blog will include more reasons and stock picks.

Reason #5: Many large countries are accumulating and stockpiling oil, coal, and gas reserves and this practice will continue and therefore will deplete supplies.

China, Russia, United States (through reserves), and numerous other countries around the world are stockpiling as much oil and energy sources as they can right now. Everyone realizes that the prices will start going up soon and that supply will be limited. The increased use of our plentiful natural gas will take many years to implement in engines and power plants and oil is here to stay.

Reason #6: Oil is the commodity that skyrockets during wars and times of political and economic uncertainty.

This is the world we all live in. The Middle East is always a ticking time bomb and N. Korea is another potential war just around the corner. Past history has clearly demonstrated how fast oil and gas prices can go up during these periods of war and unrest. Unfortunately, it is probably just a matter of time. Oil prices will rise in 2012 to challenge $125 or higher.

Even if one uses the current projections of a very modest increase in oil and gas prices as well as the conservative estimates on earnings, the valuations of numerous major integrated oil and gas stocks and drilling and exploration stocks are very attractive at these price levels.

The following chart lists our favorite picks:

Major Integrated Oil & Gas Stocks and Oil Drilling and Exploration Stocks
Top Major Integrated Oil and Gas Stocks and Oil Drillers and Exploration Stocks

Top Major Integrated Oil and Gas Stocks and Oil Drillers and Exploration Stocks

Take partial positions after the next pullback in the market which should happen in the next few days and probably some next week. Add to your position on 5% drops (if they ever occur) to build out your investment position. Our best picks are highlighted in yellow.

To get our weekly TOP stock and ETF picks and detailed market commentary automatically sent to your email, enter your name and email address in form on this page (Click Here)

To find out more about why our subscription services continue to crush the market since we started in 2004, go to www.momentumrider.com.

Its Time To Buy Energy Stocks | Oil Service and Equipment Companies

Energy Stocks - Oil and Gas Service and Equipment Stocks

Many energy stocks are trading at very attractive valuations as this article is written. MR believes this is the right time to start scaling into these stocks and ETFs if you haven't done so already. And, even though these stocks could still pull back from these levels, the patient investor will be rewarded. Investors should take advantage of the low prices in our recommended stocks list. Furthermore, this article details the first four strong reasons that energy stocks and energy ETFs will be good long term investments beyond 2012. This is part 1 of a 2 part blog with four more reasons and more energy stocks to follow.

Crude oil, natural gas, coal, and refined oil products, like unleaded gas, will continue to be used extensively in the future. And while there currently is a significant large storage inventory and oversupply of all of these energy sources in today’s economic environment, the demand and supply curve is starting to shift as the world recovers. The time to invest is before that coming big demand shift happens quickly and everyone sees the recovery occurring.

Crude oil and coal are still the work horses of the energy world and that won’t change anytime soon. Furthermore, the higher demand that will be placed on these energy sources coupled with the explosive driving middle class in China and other emerging markets will put huge pressures on refined liquid gas products. We all know that inflation is coming in the next few years if not sooner.
Even during the 1970’s and early 1980’s when inflation was raging and the general stock market was falling, energy related stocks made strong gains.

This article will discuss numerous reasons to invest money in energy stocks and energy ETFs and details support for upward price pressures going forward for years to come.

Reason #1: Oil, coal, natural gas, and unleaded gas are cheap at their current price levels as measured on an inflation adjusted basis from their previous historic peaks.

While oil is not cheap relative to the overall historic levels ($100), it is still cheap compared to the recent $126/barrel level in 2008 and also compared to the $108 per barrel in the late 1970’s. Coal is selling now at 2005 and 2006 levels and over 50% less than the peak in 2008. Natural gas is selling at very cheap levels (< $2.50 per thousand cubic ft) even after the recent bounce this week.

Reason #2: The oil supply is disappearing much faster than new sources are being found and some experts have argued the “peak energy” story for years now.

It is true that the probability of finding a large undiscovered oil source is probably close to zero at this point. In addition, the recent trouble with deep water and offshore oil rigs in the ocean obviously doesn’t help the situation. The emerging market middle class growth is still strong and the demand placed on energy from that explosive growth will stay high. China’s and India’s growth in automobile purchases alone is daunting for oil and refined products to keep up with. This means higher energy prices are coming and investment opportunities in top energy stocks, especially the oil service and equipment stocks, makes sense.

Reason #3: The oil service and equipment ETF chart is a good example of a consolidation and basing pattern. It has been gaining momentum in 2012 and it broke a significant 7 month downtrend line. Now the price action is moving up to breakout above the 500 SMA and the 200 SMAs. This is an opportunity to scale into some stocks in this sector before a breakout occurs.

Energy Stocks

Reason #4: Inflation will become a huge issue in the next few years and beyond. This will put significant upside pressure on oil and all commodities as it did in the 1970’s and early 1980’s. The recent Fed stance of keeping interest rates very low through 2014 will eventually spark inflation.
This reason alone supports a strong move up on energy and therefore a positive environment for oil service and equipment stocks. Even though the stock market was in a bearish trend in the 1970’s and early 1980’s, energy related stocks still showed significant gains. Many of the oil and gas equipment stocks even showed gains of several hundred percent.

The following chart lists our favorite Oil and Gas Service and Equipment Stocks:

Top Energy Stocks

Take partial positions after the next pullback in the market which should happen in the next few days and probably some next week. Add to your position on drops to build out your investment position. Use any breakout above the 500 SMA or 200 SMA for trailing stops. Our top picks and their risk level are highlighted in yellow.

To get our weekly HOT stock and ETF picks and detailed market commentary automatically sent to your email, enter your name and email address in the form on this page (Click here)

Thursday, January 26, 2012

Apple Blows Out Earnings and Good Value Financial Stocks

Top Value Stocks - Financial Stocks

Apple Earnings Blowout and Fed Surprise
The Greek government is still trying to work out an important agreement with its private sector creditors by the end of this week. But while the market waits for that, Apple had an absolute blowout earnings quarter and finished up over 6% for the day. Although, there was some profit taking at the highs which means the trend is ready for a breather. And the DJIA had a big reversal day of 200 points when it hit a low in the morning of -95 points and went over +105 points late in the day. It finally finished up +83 points.

The DJIA is nearing its 2011 highs and the S&P 500 is also trending up towards its 2011 high. The S&P 500 finished at 1326 with the target highs between the 1350 to 1360 area. The Fed's news of extending the current low interest rates to the end of 2014 really spurred on buying late in the day. It was a bit of a surprise to many and their language still left the door open to QE3. Extending free money availability another year was viewed as bullish news.

The markets have come a long way from the end of November and in the last 30 days. The technicals are very extended and a 2 to 3% pullback would be healthy. The question is whether a pullback comes before testing the highs first or not. That is a difficult call at this point.

The natural gas bottom call MR made over the weekend was a good one. It has moved over 17% in just 3 days and is the biggest move in 4 years. It certainly helped to have Obama mention natural gas in his talk last night. Wait for a pullback to look at those stocks again if you didn't get in yet.

Using the Power Stocks Table:
(1) Risk: Conservative (Cons); Moderate (Mod); Aggressive (Aggr); Speculative (Spec)
(2) Stop: Typically use a 3 to 4% closing stop below the entry price
(3) Trailing Stops: Use the 10 EMA (Swing) or 20 SMA (Short Term Trader) for protecting gains once above it; SMA = Daily Simple Moving Avg; EMA = Daily Exponential Moving Avg.

Top Value Stocks to Buy for 2012 - Financial Stocks - Part 4

Our focus for the last financial picks will be in the brokerage and asset management areas.
These stocks still may have some more selling in 2012, but investors that can scale in just a bit at these levels should still be okay for a more than 2 year holding period. The positions should be small ones in your portfolio but the gains could be 100% or more conservatively with patience on many of these picks.
News could potentially drop these stocks more in the coming months. So trade with small amounts accordingly. True valuations are difficult to determine but we have included the PE ratios and reported Price-to-Book ratios in our chart. Our top stocks by risk are highlighted.

Top Asset Managers and Brokers:

Investor Notes:
Investors can start looking again at oil service stocks and precious metal mining stocks. Both look ready to rebound after going sideways or finishing up long downtrends. Many of the precious metal mining stocks had big reversal moves today. We will provide a few oil service picks tomorrow and precious metal mining stocks this weekend.

Wednesday, January 25, 2012

Top Stocks To Buy In a Growing Economy

Momentum Rider strongly recommends that when you are looking for the top stocks to buy that you look at high growth stocks. That means that you should scan for high growth companies, high growth sectors, and high growth countries or markets. For some reason, most investors are lured by beaten down and broken stocks more than stocks in strong uptrends and with high earnings growth. While the Momentum Rider trading system can show you how to identify the beaten down stocks with good value, that is not where the majority of high returns are achieved. Searching for high growth stocks will always be the best path for finding the top stocks to buy.

The best method by far for achieving high returns consistently over time is to invest in the highest growth stocks, sectors, and markets. For example, there is explosive growth occurring in China, Indonesia, Brazil, India, Thailand, Chile, Columbia, and several other countries in Asia and Central and South America. Their GDP growth numbers have been higher than 7% in the past 5 to 10 years with some even over 10% depending on the year. While the last eighteen months have been tough for many of them with slowing growth, they will rebound. Their growth will pick up again after the financial system gets past the Euro crisis for most of these countries – especially China, Brazil, and India. These countries will have some of the top stocks to buy in the coming years. They alreay have very high growth stocks for making big profits. For example, BIDU and SPRD, China stocks, were huge winners for Momentum Rider portfolios in 2010 and they still outperformed the market in 2011.

In comparison, the US has slowed down significantly in GDP growth in the recent past with typical numbers at 3% or lower. What this slower growth information tells you is that investors will find it tougher to find high growth stocks in the US. It doesn’t mean there aren’t plenty of them in the United States. It just means that the US economies growth may not facilitate the individual company’s growth as much as countries outside the US. So investors should also look at high growth stocks located in emerging market countries to achieve high returns.

Even in falling markets, the proper scans for the top stocks to buy can always find high growth stocks that will outperform the market. For example, Momentum Rider recommended the following high growth stocks in the drug and biotech industry in 2011 that were huge winners: VRUS, JAZZ, QCOR, ARIA, and ELN to name just a few. The research needs to identify high growth sectors with high growth stocks that have a good uptrending chart pattern.

Typically, we look for companies with over six consecutive quarters of earnings and sales growth rates > 20%, good pre-tax profit margins > 15%, one of the top positions in a strong industry group, good institutional buying and ownership, recent acceleration in earnings, and a product with a good macro story – like AAPL and its I-phone. It simply comes down to performing a top down approach to find the top stocks to buy – which are high growth stocks. The technical price pattern also needs to be in a strong uptrend or a recent high volume breakout from a basing pattern.

For consistently outperforming the market and finding the top stocks to buy, your trading and investing focus should be on high growth stocks. Growth is the strongest driver by far for of a country’s, sector’s or stock’s price action. Do some simple research on where the highest growth stocks are or take advantage of Momentum Rider’s subscriptions and free newsletters to find them for you. You will be well on your with the top stocks to buy for becoming a profitable trader and investor.

We identify top high growth stocks almost every week so look at our MR Power Stock Newsletter to get the top stocks to buy.