For those who allow emotions to influence investment decisions, it may feel like the market is actually built for the sole purpose of ruining their financial lives.
The thing that people generally learn the hard way is that for longer-term investments, buying the dip usually makes a lot more sense. We all know stocks don't travel straight up or straight down, but what many don't know is that after three down days a stock tends to reverse for the next week.
If you buy that "hot" stock after three up days, you have put the odds against you, and this is a game about finding a positive expectation.Spin the scenario around and buy an uptrending bullish stock after three down days and you now have put the odds in your favor and earned a positive edge. Even better than three is waiting for five days, but three is statistically close enough for most and the simplicity outweighs the benefit for most people. Does it work every time? Of course not. We are working with edges that amount to small percentages. But in a land of "no free lunches," why not take what we can get? Here are five bullish trend stocks worth examining and waiting for the dip. Avoid chasing, and look to enter after at least three down days. I have written about many of them as a result of following their moves closely. LLY data by YCharts
Eli Lilly (LLY - Get Report) Background: Eli Lilly discovers, develops, manufactures and sells products in one significant business segment --pharmaceutical products. The company directs its research efforts primarily toward the search for products to diagnose, prevent and treat human diseases. The following link is to a great