New Money Flow Monday Premium Stock Picks -- Plus Trading & Grading MFM Picks Published June 11, 2023.
Strong money flow into a stock or ETF, particularly in its early stages of an uptrend, can be a powerful indicator of potential for a persistent bullish trend delivering significant percentage gains.
A very bullish buying pressure reading, measured by StockCheatSheets.com as having a Chaikin Money Flow (CMF) score greater than .2, reflects the volume of money going into a bullish trending stock over a 21-day period. Money flow is not a measure of volume alone but a metric that combines both price and volume to assess the buying and selling pressure behind a stock or asset. It aims to provide insight into whether an asset is being accumulated (bought) or distributed (sold), taking into account how volume contributes to price movement
In the stock market, a common adage is that "volume precedes price." This means that significant changes in volume often precede price movements. A strong money flow not only reflects current buying interest but can also precede further price increases as more investors pile in, encouraged by the volume of trades signaling a strong interest in the asset.
An uptrend supported by strong money flow is often more sustainable. This is because it shows that the upward movement in price is not just speculative but backed by substantial institutional investment, reducing the risk of a sudden reversal. Stocks without such strong money flow might see their uptrends falter more easily as they could be driven by weaker sentiment or speculative trading. We all remember the run, but does anyone remember the crash of meme stocks afterward?
Here’s the good example from the past year, using Cheat Sheets Tailwind data as a proxy for jumping on the backs of deep-pocketed institutional investors when they have well-researched confidence in the sustainability of an emerging trend.
These were Premium Stock Picks for Monday Flow Monday published on June 11th, 2023. Most picks were tech stocks, the trends for which peaked in late February this year. While they’ve pulled back in recent weeks, the Money Flow Monday examples are nevertheless illustrative the kinds of persistent trends we’re always hoping to capture when we place the emphasis on strong buying pressure or CMF.
The Week’s Money Flow Monday Stock Picks for Premium Subscribers
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