In this instructional video, Chris Haroun outlines a three‑step hierarchy for selecting swing‑trade stocks: first examine company fundamentals, second assess valuation, and third consider technical indicators. He emphasizes the Relative Strength Index (RSI) as the most important technical tool, recommending buying when RSI approaches the 20‑level and selling near 80. Haroun demonstrates the analysis on Tesla using Yahoo Finance, showing how to add 50‑day and 200‑day moving averages, interpret channel formations, and recognize a “death cross” (50‑day crossing below the 200‑day) as a bearish signal. He introduces the concept of buying “broken stocks, not broken companies,” meaning entering positions when a stock’s price is sharply depressed (low RSI) while the underlying business remains sound. Briefly, he mentions other chart patterns such as ascending triangles. Throughout, he stresses that fundamentals and valuation remain primary, with technicals used mainly for timing entries.
Chapters
How do I select stocks for swing trading and what do I analyze? Yeah, so careful with trading. Yeah, but, but I will go through it. So whenever you invest, I recommend number one, look at fundamentals. Okay. Number two, look at valuation and a distant third, look at technicals. I think the most important thing to look at is the relative strength index. And so quite simply, let's go here to Yahoo. Finance and you can pick any stock you want. Let's pick Tesla. A lot of people on that one. Okay, so the most important technical indicator and yes, you all know I look at valuation fundamentals first is we look at a couple of moving averages and the rsi. Okay, look at that. Amazing. And Elon backed up the truck and bought a ton of shares in March of 2020 when everyone was freaking out. Cause he's unemotional and brilliant. I love it. Okay, so down here I've got the rsi. Okay. So if the RSI gets down close to this red line which is tough to see 20, then buy. If it goes way above sell, obviously it works on short term trade sometimes, but not all the time. So above 80 sell at 20 buy. Right. You all know I'm a long term investor, so it's the last thing I look at. But I do look at technicals in terms of when to get into a position. I love to buy stocks that are broken. I buy broken stocks but not broken companies, meaning I like to buy stocks. When it feels like you're catching a knife. It's scary because no one else is buying that. And usually the RSI is close to 20 in that point. What you can also look at is you can actually look at the 50 and 200 day moving average. You can add these moving averages. So the 50 day will do. Here is purple. Okay. So basically the way it works and it's easier to look at the chart if it's less than a year. Yeah. So what happens is this. A lot of investors, technical investors, traders, they love to look at moving averages and if it doesn't break a moving average, then they keep investing. I know it sounds silly, but it's self fulfilling. So here we can see a beautiful channel formation on this stock here. Okay, so it's never violated the 50 day moving average or at least it hasn't in since last year. Right. So if it comes down here, tests and bounce, people get excited, they keep investing. I know it's silly. People also look at something called the 200 day moving average as well. They've had a lot of new stuff here too. Wow. All right, so 200 day moving average, 50 day moving average. People look a little bit more closely, right? 200 day moving average down here. And if you see the 50 day moving average, cross, cross down through the 200 day moving average, it's called a death cross, and people freak out. The bottom line, though, is look at the rsi, like I mentioned, after you look at fundamentals and valuation, of course. And then also you can look at the moving average as well. And there's other things too, like ascending triangle. I could go into more detail on that if you want to. But make sure to look at fundamentals first, valuation second and technicals. The distance third. Yeah.
