A bulk of a stock’s move is due to the underlying sector; a rising tide can lift all boats. Keeping track of the best performing sectors and the stocks within the sectors is a great way to narrow down the stock universe to the strongest stocks in the currently favored sectors.
This week we have some of the usual sectors that have been very strong for last 4-5 weeks; Captial Markets (banks), Oil & Gas, Semiconductors.
Rest of the list;
Knowing the top 20 sectors is a starting point, what you want to do next is narrow down stocks within the sectors to a manageable list. You can narrow down the list in many different ways; market cap, price per share, earnings/revenue growth, etc. I like to narrow down the list by creating a scan that shows me the stocks that are not extended based on how far they are away from their respective 20-day moving average. This particular scan will only show me the stocks that are within 3% of their 20-day moving average.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.
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