The stock market is a brutal beast that is constantly moving and changing. Jim Cramer's guide uses charts to analyze the market price of a share of stock over it's history before jumping in to purchase it.
An investor does not buy a stock with the thought that the value will down after they buy shares. Cramer's idea is that by analyzing the ebbs and flows of a stock's price history over time a prospective buyer will have a better chance of finding a stock that will not fail. He is quoted as saying that looking at the history before buying is "like part of the homework" of buying stock.
Cramer often cites his own experience with the 2009 decline. Knowing when to buy and sell is the critical key in winning at the stock market battle. Cramer knew when to buy in 2009, and he looked around then to find the best stock for the time.
After his research, he found that AT&T was the best choice for a safe stock. He checked the charts on their history and, with help of other chartists, thought that they had bottomed out the year before. The large amount of stock that had been sold indicated that many of the longtime stockholders had sold their shares of stock. Looking for other trends like, a stock that is still selling but not going down in value, are great ways to tell when a stock is ready to buy. Cramer made a great deal on AT&T and has designed a revolutionary system that can possibly help many others understand more about the stock market.
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