bowater

Taking Advantage of the January Effect

the method i use(explained above) is not based on any theory.

it is based on fact.

what causes stocks to go down or stay down.....selling(profi... taking or tax loss selling)

in my examples of the picks in December, there is no profit taking, only tax loss selling in these.
almost no one takes a tax loss in January. so the selling pressure is off the stock.
the profit takers in January are investors that shorted the stock at high prices in the early part of the year. they are buyers covering their shorts.
this buying moves the stock higher.

if they shorted a stock at $10.00 and it is now $2.00, they cover.

Covering at $2.00 or $3.00 is fine. YOU buy at $2.00 in Dec and sell at $3.00 in Jan.
I have seen stocks that were $8.00 that are now .55 cents. o.k. companies. these could go to $1.00 or more.