Welcome to the Beginners in Stock Trading Newsletter! Over the next several months, you’ll receive expert insights, proven strategies, and real-world examples from some of the greatest stock traders in history.
Every newsletter has 2 sections. The 1st section is devoted to learning. Each building on the previous day’s lesson in logical order. Giving you a full, free trading education in under ten minutes a day.
Missed a day? You can find all of the previous newsletters online to catch up or if you joined later.
The 2nd half of the newsletter is a briefing on 1-3 stocks in the news. Read it. Then click on the links to see the corresponding charts inside the original articles. This will accelerate your ability to read the charts.
Learning to how to trade will change your life.
Daily Lesson(each builds onto the next)
📝 Today, You’ll Learn:
✅ What the 200-day moving average (200-DMA) reveals about long-term trends.
✅ Why institutions rely on the 200-DMA to determine what to buy—and what to avoid.
✅ How to use the 200-DMA to manage risk, filter watchlists, and time better entries.
The 200-day moving average isn’t just another line on your chart.
It’s a wall of trust—or a wall of doubt.
When a stock trades above its 200-day, it tells you:
✅ Big money is buying
✅ The long-term trend is intact
✅ The stock is likely under accumulation
When a stock trades below it:
🚫 Funds are selling or avoiding
🚫 The trend is broken
🚫 The odds of success just went down
📖 William O’Neil emphasized:
“Stocks trading under the 200-day are guilty until proven innocent.”
🧠 What Exactly Is the 200-Day Moving Average?
It’s the average closing price of the last 200 trading days (~10 months).
It smooths out noise and gives a clear view of the stock’s long-term trajectory.
A rising 200-DMA = a healthy, steady trend.
A falling 200-DMA = long-term weakness, often with institutional distribution behind it.
📖 Mark Minervini put it simply:
“If a stock is living under the 200-day, it’s not healthy. No matter how good the story sounds.”
🔍 How Institutions Use the 200-Day
Institutional investors and hedge funds manage billions. They can’t risk being caught in a falling stock.
That’s why many fund managers won’t even consider a stock below its 200-day.
A breakout above the 200-day on volume often signals:
Fund managers are stepping in
The trend may be reversing
You’ve found a potential former leader coming back
🧪 Real-World Examples
✅ NVIDIA (NVDA) in 2022
After a long selloff, NVDA reclaimed its 200-DMA in January 2023 with strong volume.
It based tightly above the line for several weeks.
Then broke out and more than doubled within 6 months.
✅ META (Facebook) in 2023
The stock climbed back above its 200-day in late 2022, but failed to hold it.
That failed retest was a clear warning that sellers were still in control.
It didn’t begin its new uptrend until it regained the 200-day with volume confirmation.
🚫 Peloton (PTON) in 2021–2022
After peaking, PTON slid under the 200-day and never recovered.
Multiple bounces back to the 200-day failed.
Each was an opportunity to exit, not enter.
📉 Sell Signals Involving the 200-Day
❌ Break below the 200-DMA on above-average volume
– Institutions are exiting.
❌ Repeated rejections at the 200-DMA
– Supply is overwhelming demand. No reason to buy.
❌ Flattening or declining 200-DMA while price trends down
– Long-term momentum is broken. Avoid.
📖 Jesse Livermore warned:
“A stock moving below long-term support and staying there is making its intentions clear.”
🛡️ Buy Signals & Recovery Scenarios
✅ First close above the 200-day on volume after a long downtrend
– Early signal that accumulation may have returned.
✅ Tight consolidation above the 200-day
– Watch for breakouts from this new base.
✅ Volume clusters at the 200-day on a pullback
– Smart money may be defending the trend.
📌 Trader’s Checklist: How to Use the 200-DMA Like a Pro
✅ Is the stock trading above or below the 200-day?
✅ Is the 200-day rising, flat, or declining?
✅ Has price recently reclaimed the 200-day with strong volume?
✅ Is the 200-day acting as support or resistance?
✅ Are market indexes also above their 200-day (context matters)?
🎯 Action Step: Chart Audit and Watchlist Cleanup
✅ Choose 5 stocks you’re watching right now.
Ask:
Is the stock above the 200-day?
Is the line rising or declining?
What happens each time the stock interacts with the line?
Do you see evidence of accumulation—or distribution?
✅ Remove anything showing consistent rejection below a falling 200-day.
✅ Flag any former leader reclaiming the 200-day with power.
🧠 Final Thought:
The 200-day moving average doesn’t tell the future—but it reveals the truth about the past.
And in markets, that truth is often all you need to make a better decision.
📖 O’Neil concluded:
“Great stocks respect the 200-day. Weak stocks don’t. It’s that simple.”
Train Your Eyes On This Pattern(of the month)
Double Bottom
📉 What Is a Double Bottom Pattern?
A double bottom is a bullish reversal pattern that signals a potential end to a downtrend and the beginning of a new uptrend.
It’s shaped like a “W” on a chart and forms when a stock tests a low price level twice, finds support each time, and then breaks out above the midpoint between the two bottoms.
✅ Key Traits of a Double Bottom:
Two Distinct Lows
The second low should occur at or slightly below the first (a shakeout is common).
The time between lows should be at least 3–4 weeks, ideally longer.
Tightness and Volume Clues
The second bottom often occurs on lighter volume, showing selling is drying up.
Watch for increased volume as the stock rises from the second low and especially on the breakout.
Buy Point (Pivot)
The buy signal is triggered when the stock breaks above the peak between the two lows—known as the pivot point.
Volume should be 40%–50% above average on the breakout.
📖 William O’Neil’s Perspective:
“The double bottom is one of the most successful base patterns when formed properly, with the second low shaking out the weak hands and the breakout occurring in sync with a strong market.”
📊 Real Example:
Let’s say a stock drops to $50, rallies to $58, then drops again to $51.
If it then surges past $58 with strong volume, that’s your buy signal—with a pivot at $58.
📊Chart Example:
Use these market tools to scan for and review stocks:
✅ MarketSmith (MarketSurge) – Premium Market Analysis and Scanner Tool
✅ Charts.com – Budget-Friendly Charting Option
✅ TradingView – Free & Subscription Stock and Crypto Charts
✅ DeepVue – MarketSurge Inspired Analysis and Scanner
👀 Seeing real-world stock patterns helps train your eye for long-term trends.
Our Sister Newsletter. Because everyone’s a Beginner in something.
News
COINBASE ROCKETS, UNITEDHEALTH CRATERS—MARKETS HEAD IN OPPOSITE DIRECTIONS
The Dow slipped 0.3% after UnitedHealth plunged nearly 15%. Investors were rattled by CEO Andrew Witty’s exit and the company’s scrapped 2025 outlook, leaving the blue‑chip average in the red even as trade optimism lingered. Meanwhile, lighter April inflation numbers (‑0.1 ppt vs. March) helped the S&P 500 climb 0.7% and pushed the Nasdaq up 1.4%, extending Monday’s momentum.
Coinbase stole the show, soaring more than 16% on news of its upcoming berth in the S&P 500. Sea Ltd., CyberArk, and On Holding joined the winners’ column after upbeat reports, and every major index reclaimed its 200‑day line except the Russell 2000, which remains 4% shy. Bitcoin hovered near $103 K and oil sat just above $63.
Stock Spotlight
Amer Sports (AS)
Sports Gear Maker Tests Buy Point Amid Tariff Relief
Amer Sports (AS), the parent company of brands like Wilson, Arc'teryx, and Salomon, is approaching a buy point following positive developments in U.S.-China trade relations. The recent reduction in tariffs from 145% to 30% on Chinese imports is expected to benefit the company, which sources approximately 20% of its goods from China and Vietnam. This news has propelled the stock to test the 29.76 buy point of a double-bottom base.
Key Facts:
Current Price: Approximately $29.00
Tariff Impact: Reduction in U.S. tariffs on Chinese imports from 145% to 30%
Sourcing: 20% of goods sourced from China and Vietnam
Q4 Performance: Direct-to-consumer sales increased 46%; Greater China sales rose 54%
IBD Composite Rating: 89, highest among 25 stocks in the leisure products industry group
Upcoming Earnings: Q1 earnings report expected on May 20, with projections of $0.15 EPS and $1.382 billion
What Traders Can Pick Up:
Trade Policy Influence: Changes in international trade policies can significantly impact companies with global supply chains.
Brand Strength: Strong performance in direct-to-consumer sales indicates robust brand loyalty and market presence.
Technical Indicators: Testing a buy point suggests potential for stock appreciation, especially when supported by positive fundamental
Refer a friend
5 referrals How to Make Money in Stocks Complete Investing System by O’Neill
10 referrals How to Make Money in Stocks Success Stories by O’Neill
15 referrals How to Make Money in Stocks, Getting Started by Matthew Galgani
30 referrals Trade Like a Stock Market Wizard by Mark Minervini
50 referrals Lifetime access to the upcoming video courses and 50% off live events and digital products
How to Make Money in Stocks Set
Thank you for reading. We’re all Beginners in something!
-Beginners in Stock Trading Team
This newsletter is for educational and informational purposes only. The content herein should not be considered financial advice, investment advice, trading advice, or a recommendation to buy or sell any securities or financial instruments.The strategies, opinions, and examples shared reflect the personal views and historical references from publicly available sources, including the works of William J. O’Neil, Jesse Livermore, Mark Minervini, and other professional traders.Trading in the stock market involves risk, including the risk of losing capital. Past performance is not indicative of future results. You should conduct your own due diligence and consult with a licensed financial advisor or registered investment professional before making any investment decisions.
We do not guarantee any specific outcome or profit. You are solely responsible for your own financial decisions and trading actions.