The Getting's Good on Qualcomm

A lot of folks have been emailing me regarding some recent comments I made to Herb Greenberg about momentum investing, a topic he discussed yesterday on CNBC.

One of the main points I made was that most momentum investors fail to ask the right question, and that is: "Who is left to buy this stock?"

Everybody has some underlying reason for buying a stock -- even if it's nothing more than the same reflex we see in largemouth bass when they snap at a shiny object. You always have some reason for buying the stock.

But if you are hardwired toward buying stocks with high momentum, you've always got to question your timing.

Are you very late in the trend, or are you just catching the first wave of the advance? You'll know by looking at the chart.

Compare the current price with the price of the effective base. How much higher is it? How long has the stock been moving up without a break? Is the slope of the trend accelerating to the upside?

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At the time of publication, Fitzpatrick had no positions in stocks mentioned, though positions may change at any time.

Dan Fitzpatrick is a freelance writer and trading consultant who trades for his own account in Encinitas, Calif. He is a former co-manager of a hedge fund and teaches seminars on technical analysis, options trading and asset-protection strategies for traders and business owners. Fitzpatrick graduated from the McGeorge School of Law and was a fellow at the Pacific Legal Foundation, a nonprofit public interest firm specializing in constitutional law. He also practiced law in the private sector before pursuing trading as a full-time career. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Fitzpatrick cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.