Hey traders,
All week we’ve been building on a theme.
First, I showed you how to check the condition of the market: is it bullish, bearish, or just stuck in the middle?
Then yesterday, we talked about measuring the strength of the market by looking at new highs vs. new lows.
Now let’s get to the most important piece: how I pick the best stocks to trade.
Why I Start With 52-Week Highs
I know it goes against the old saying — but I don’t “buy low, sell high.”
Here’s why: if a stock is “low,” it can always go lower. That’s a trap too many traders fall into.
But if it’s making new highs? That tells me it’s already trending. And trends are where I want to be.
That’s why I look for 52-week highs. I want to buy high… and sell higher.
The Criteria That Keep Me Safe
Of course, not every new high is worth touching. I keep it simple with a few filters:
- The stock’s got to be trading over $25 a share.
- It must be on a major U.S. exchange — no penny names, no foreign stocks, no crypto.
- It needs at least 1 million shares a day in volume, so I know I can get in and out.
- And it’s got to have options available, because options are how I pull income.
Once I’ve got that list, I look closer at the highs.
A Real Uptrend — Not Just a Pop
The key is to find stocks making those highs within the context of a steady uptrend.
That means it’s not just a one-day gap on news. It’s a steady march higher, bouncing off trend points, showing me it’s got real momentum.
Those are the stocks I want in my corner.
The Triple Crown of Income Trades
When I find one of these setups — a stock trending higher, hitting new highs, and meeting all my criteria — I know I’ve got choices.
Sure, I can buy the stock outright.
But I can also run what I call my “Triple Crown” of trading — different ways to get paid while the trend does the heavy lifting.
I can sell covered calls.
I can sell naked puts.
Or I can run credit spreads.
The Takeaway
Trading doesn’t have to be complicated.
Start with the condition of the market.
Check the strength.
Then zero in on stocks hitting new highs in strong uptrends.
From there, pick the income trade that fits your style and account size.
That’s it! Keep it simple. Let the trend work for you.
Trade well,
Jack Carter
P.S. Are We On The Verge Of A Tech Sector Breakdown? Click here to access the prep class for FREE!
