How to find the bubble stocks

From time to time some stocks catch investors fancy and in a very short period of time double or triple. In most cases there is some "hope" story behind these stocks. These stocks can make breath taking moves before collapsing.

Bubbles are more common when breadth becomes excessively bullish. These kind of periods are characterized by such irrational moves. To find these kind of periods look at the Market Monitor readings on Number of stocks up 50% in a month. When the readings climb over 20 you will notice big moves in many speculative stocks on marginal catalyst.

These readings seldom climb above 20. For months you will see readings below 20, but once they climb above 20 you will notice the big speculative bubbles on handful of stocks, especially on low priced stocks and stocks with questionable fundamentals. They will make bigger moves during this period as speculative juices are in full flow during such periods.

As a momentum trader looking for such speculative excess period can offer you some good lottery ticket opportunities on low priced stocks. All such stocks rise up in momentum ranking during this period.