Use ADX to Find Stocks That Can Double
During this past summer (July 16th), I did a webinar presentation for eTraders Expo. The topic was how to find Power Trending stocks. One of the best ways I know is to use the ADX indicator. ADX quantifies trend strength, so it allows you to differentiate between weak and strong trends.
At the end of the webinar, I gave the audience 6 stocks to follow, and I said that it was highly likely that at least one of them would double in price over the next year. Below is the list of stocks I gave. After only 3 months, we already have a 100% winner--VIPS.
The overall list did quite well, with 4 out of 5 winners, and 3 in double digits. But there are still 9 months left to go for the other stocks!
The chart of VIPS above shows that the ADX (blue line) hit 70 (very strong) in February. With that kind of strength, it was likely to trend higher after a retracement or range period (July's webinar). Note also, that the +DMI (green) never crosses the -DMI (red). This is evidence of sustained buying strength.
If you want to find a stock that can double, make sure the stock has proven itself with strong a ADX reading!