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How to Track Fast Moving Industries

Learn why tracking fast-moving industries and following industry sub-groups is crucial in stock market success. Discover how to identify top industry groups, leading stocks, and key industry trends for profitable investments. Utilize proven strategies and tools to maximize your trading potential. Enhance your understanding of industry sub-groups to stay ahead in the ever-evolving market landscape.

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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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