Stocks The Institutions Love

The market rose last week, which was a surprise in sleepy August. My hunch is that this bodes well for a September rise as well.

August is when the institutional traders that have the power to make stocks rise or fall go on vacation, so the market can be lackluster. This timeframe spills into September because the big traders avoid making huge profits around Sept 11th out of respect for those we lost on Wall Street that day.

After Sept 11th, it’s full speed ahead for trading.

I talk a lot about stocks that have a great 5 year, 1 year and 1-3 month chart. These stocks beat the market in the past 5 years. They tend to be mid-range in price or "expensive".

Here are 2 things to know:

1. Stocks are expensive because the company is worth a lot. This is a fact we have to let sink in if we want to make great returns.

2. Institutions like to trade stocks that are worth $100+ per share. Institutions can create the ripples of volatility we need in a stock to profit from options. They also like to go in and out of owning the same stock so they create stability. Stability + volatility is where it’s AT for options trading.

    

I understand that many people can’t afford to hold 100 shares of these stocks when they are starting. But, I’m hoping you’re using your premiums to invest in quality stocks with high institutional involvement bit by bit to get a dream allocation in your portfolio over time.

Here’s a list of stocks that have great charts. Check them out and let me know if you have any to add. It’s up to you to decide if these are right for your portfolio.

$AAPL

$MSFT

$NVDA

$AMZN

$GOOGL

$HD

$LOW

$MA

$V

$WMT

$COST

If you want to hear my feedback on a stock write back, and I’ll reply with my analysis on it. See you next week!