Options As Indicators

Often the first sign of a rally in a stock is increased activity in its options.


Recommended: Look for newcomers on the "Most Active Options" list in The Wall Street Journal.

The R&D Indicator

The amount of money a corporation spends on research and development is a good guide to its earnings prospects. Generally, the higher the expenditure in relation to sales, the greater the company's emphasis on new-product development. 

Benchmark: 5% of annual sales spent on research is considered a sizable commitment to research spending.

*Source: Merrill Lynch Stockfinder Research Service, 165 Broadway, New York 10080