This is the one you want to avoid at all costs! I saw a lot of these back in 2000. I also saw it in
back in fall of 2012. A decent technician gets out of the way of these types of trends. Stubborn fundamentalists hang in there insisting that the market has it wrong.
That is why I like to combine fundamental with technical. It gives me more evidence to consider.
I am a very, very demanding investor. I must have performance numbers on a stock that show me that it is far superior to the rest of the market.
But I also demand a reasonable valuation. I like stocks that have the potential to double over the next five years. The numbers have to support my equation. Valuation without performance is like shopping at J.C. Penney.
Lastly, I demand a healthy a stock chart. This really narrows the field down considerably. In fact, usually only 200 to 300 stocks make my watch list of the 3,600-plus that I track on a daily basis.
Tesla was ranked #1,015 on Tuesday. Not even close to being worthy of my requirements.
Data from Best Stocks Now App
I warned as many as would listen. Valuation still matters!
This article was written by an independent contributor, separate from TheStreet's regular news coverage.