Finding Bottoms in Stocks

1-A stocks needs to lose most if not all of its sponsorship to form a true bottom
-when everyone has downgraded a stock and it still has a decent balance sheet, your downsize is limited
2-Bad news hits and the stock cease to go down
-bottoms get formed only when all of the sellers have finished, so there is no one left who cares about the new negatives to want to dump the stocks
3-Large insider buying
-management buy shares for one reason: to make money
-make sure it is large insider buying, small amounts of buying from management could be used as a tool to deceive investors to make it look like the company is attractive
4-A stock is rumored upon negatively and nothing happens
-negative rumors usually start with large hedge funds which are trying to cover their shorts; this is used in desperation because they know that the stock is more than likely going to go up unless they can do something about it