Breakout

S

ShoeshineBoy

I found a stock going through a new breakout (of its previous high). One thing that really attracts me to it is the fact that there is an incredibly high percentage of insider acquiring. Is this really that positive of a sign? Do you feel that insider purchases have any correlation in this situation? Thx.
 
It often is. Insiders, by definition, have inside information. If they are investing their own money it's virtually always a good longer term sign.

Conversely, insiders selling or exercising options at the lower end of the price range is virtually always a bad sign.

 
I have generally found that insider buying can be useful information for a position trader, but of little value to shorter-term timeframes like day or swing trading. On the other hand, insider selling generally means very little, unless carried out to an exhorbitant degree. Reason being, it's often related to options expirations and normal portfolio rotation.
 
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