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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: kha vu who wrote (27920)	3/16/1999 10:36:00 PM
From: Jenna	Read Replies (4) \| Respond to of 120523

Sector Strength and importance for our picks: A few days ago in a terrific post by kha vu, he mentioned that in the morning he likes to check out sector strength with some of the market gems picks (that works with anyone's picks not just ours). I want to stress the wisdom of this.. Before posting the Market Gems picks, I myself look for the leading sector. I do this simply in Prosearch which has a criteria called "1 week change in sector rank" this means that any sector that has changed ranks (say from 56 to 21 or even from 20 to 2) will come up on my scans. I give this one scan a 100% weight looking for the highest ranking sector and the largest %increase in rank. That would be a preliminary search to weed out weak sectors. From there I look for the second scan which is picking out the best performers from that sector both in fundamentals (weighted about 60%) and Momentum (i.e. technical strength) weighted at 100%. This assures us of getting the bellwhethers from each sector. Then you check the chart to see how far these stocks are from hitting their resistance lines. Are they consolidating? or are they riding the upper bollinger bands? close to a MACD and/or MACD breakout? How close are they to 13,30, 50 day moving average breakouts? How is the On Balance Volume.. Has it improved, has it broken out? What about volatility? Is it high, the higher the better. Is it close to a point & figure breakout? How about institutional interest? Are there more than the usual big blocks going through. (you would expect large blocks going through with CPQ but if a stock like JEF has 50 blocks going through then somethin is 'cookin' here.) That is also why if a particular strong sector like the telecommunications sector lags the day the watch list comes out, it only means that the entire sector is out of favor for that particular day and by the next day or two we should have a return to favor (of course this is only true for high ranking stock sectors). Remember if we are looking for longer term positions in these companies, you should set your indicators (MACD, Stochastic, RSI) to a WEEKLY rather than DAILY MACD. with the weekly MACD you can a longer established trend and the daily MACD will trigger your entry and exits. I like to do both. The weekly stochastic will show a more stable and early breakout for a longer time hold, whereas the daily breakout is good for actual entry points. From there you check the 15 minute charts with your trendline analysis ,bollinger bands, channels, or envelope to determine actual intraday breakouts. Give them 1-3 trading sessions and the moment the sectors comes back these stocks will be the first to breakout.