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How to Track Fast Moving Industries

How to Track Fast Moving Industries. Why follow Industry sub-groups? . Roughly ½ of a stock’s move is drive by the industry sub-group. (source: How to Make Money in Stocks pg 323 4 th edition) The majority of the leading stocks are usually in leading industries.

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How to Track Fast Moving Industries

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  1. How to Track Fast Moving Industries

  2. Why follow Industry sub-groups? • Roughly ½ of a stock’s move is drive by the industry sub-group. (source: How to Make Money in Stocks pg 323 4th edition) • The majority of the leading stocks are usually in leading industries. • 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

  3. How to follow Industry sub-groups • Look at top 20 Industry sub groups listed in IBD under the big picture column. • Ask yourself, “Which sector had the largest increase in last 6 months. • Type in the group name in search field at www.investors.com • Pull up one of the stocks from the search

  4. How to follow Industry sub-groups • Look at group leaders under stock quote info • See if any of the group leaders are near a buy point. • If so, check fundamentals to make sure stock is sound (CAN SLIM) • Example: Medical Outpatient/Home Centers group • Went from 79 to 6 in six months

  5. Other ideas for following sub groups/industry trends • Below top 20/worst 20 table, look at • Top Fidelity Sector funds • Top Sector ETFs • Groups with Best % of new high stocks • Daily Industry Themes • Ask, “what industry are leading this market.” • Defensive groups like food, beverages • Growth groups like technology • Clue to general market trend

  6. Industry sub-groups • http://finviz.com/groups.ashx?g=industry&v=310&o=-perf1w • Free web site that lists industry performance • Use it to find winning stocks • Check chart to see if they are in a base near a buy point • Use investors.com to check fundamentals

  7. Group Exercise • Check the IBD top 20 once a week and see which sub-industry has greatest improvement over last 6 months • Report back to group on top stocks in these sub-industries • This exercise will help us find leading stocks in top sub-industries • Will build discipline into our trading/investing

  8. Summary • Nearly 50% of a stock’s move is based on sub-industry and general market direction • Use IBD top 20 groups to see what sub-industry’s are improving the most over the last 6 months • Use investors.com to check leading stocks to see if they are near buy point and have good fundamentals. • Group will report monthly on trends and leading stocks in top sub-industries

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