Moving from knowing single letters to reading words is all about blending the sounds together. Try this technique:
1 – Using a 2 or 3-letter word, point to the letters and say each sound.
2 – Then start back at the beginning of the word. Slide your finger slowly under the letters as you stretch the sounds and put them together.
3 – Have the child try to do it, too.
Keep it simple here. Stick to words where every letter makes its “normal” sound. Stay away from words where two letters work together to make a new sound, like the th in “the.”
Source: TheClassroomKey