According to studies done by Investor Business Daily the majority of the “leading” stocks are usually in leading industries. Their studies show that “37% of a stock’s price movement is directly tied to the performance of the industry group the stock is in. Another 12% is due to strength in its overall sector; Therefore, roughly half of a stock’s move is driven by the strength of it’s respective group”.
One of the ways to take advantage of this is by focusing on the stocks that are in the top 20 best performing industries in the last quarter.
In green are the industries that are new to the top 20 this week.
There’s roughly 561 names within these 20 groups. To narrow down the list we only included stocks that have traded at least on average 100,000 shares daily for the last 20 days. Then we narrowed down the list further by screening for stocks that are not extended in the short term, that took us down to 116 names. Out of those 116 names only 6 have a decent risk reward ratio for swing trades based on their chart pattern. Today the market will again narrow down the list further for me since I will only look to get involved in the names that trade above their previous day high.
Below are the names that I believe are set up technically (the way I view charts) for 1-20 day swing trades.