Here Are Jim Cramer's Rules for Spotting a Stock Market Bottom
Jim Cramer has unveiled his "Five Ways to Spot a Market Bottom" in his latest private call with members of his Action Alerts PLUS club for investors.
Cramer said current market conditions have mostly met his five rules for spotting a market bottom: Rule No.
Don't stay too negative when the market sees a crescendo of sell volume and noted bears have begun to turn bullish.
Concentrated, large buying from insiders can't be ignored and most likely should be embraced.
When a particular company faces a persistent parade of bad corporate news but its stock stops going down, you have the possibility of a very good, lasting bottom.
Look for high-quality companies that have become "accidental" high yielders -- offering 4% or better yields not due to dividend hikes, but because their stocks' prices have fallen so much.
If a company with a good track record of buying back stock announces a new buyback program (especially one representing more than a fifth of the firm's market capitalization), management likely believes that the stock has bottomed out.
To learn more about how to apply these rules to your own investing plan, sign up a free 14-day trial to Action Alerts PLUS and watch a replay of Cramer's video conference in its entirety.
Joining Action Alerts PLUS gives you automatic access to all of Cramer's monthly private video-conference calls, in which the expert gives his latest market outlook and answers e-mailed questions from club members.
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