Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market

8.8. THE SIXTH COMMANDMENT

The Fifth Commandment may in fact help you stick to the Sixth Commandment: "Don't get giddy at the top," because that is usually the time to be selling.

If Bill O'Neil were given a choice of being able to use only one type of chart interval, he would pick weekly charts. At least this is what he once told us, and there is good reason for this. First of all, O'Neil shuns reacting to news and other noise, including unusual intraday price swings. Intraday charts to O'Neil are virtually useless. At one time, he felt that having real-time quotes were a distraction, since operating on a 20-minute delayed basis did not seem to be a burden to his applied temporal frame of reference. O'Neil is on the hunt for "big stocks" that are heavily trafficked in by institutional investors, whose deployments of cash constantly move into big, winning stocks that are at the cutting edge of any economic growth cycle. Institutional investors buy and sell their stock positions over a period of many weeks, sometimes even months, so their activities are not likely to be picked up by an intraday chart, and in most cases probably not by a daily chart either. For this reason, weekly charts are the preferred "visual tool of choice."