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How to monitor and trade top sectors

Posted on 8/21/2009

To do this you need subscription to :
IBD Daily Graphs and
IBD Custom Screen Wizard
Here is how I do it:
Step 1
DailyGraphs Industry Groups
Take top 3 stocks from top 20 sectors.

EPS+RS (sorted by EPS)
I have shown first 3 sector stocks. Like that I get 20 sector top 3 stocks.
Rank IBD Industry GroupStock
rank1
Stock
rank2
Stock
rank3
1Paper and paper products kppc clw rkt
2Auto Truck Original Equip TXIC WATG caas
3Media Radio TVsalmctcmsga
4
5
.
.
20
This goes to Top 20 Sector Watchlist in Telechart

Step2
DailyGraphs Custom Screen Wizard
Sector rank= 1 to 20
Composite Rating>96
Screen Name: top 20 sectors 96 composite
To Top 20 Sector Watchlist in Telechart
Step 3
DailyGraphs Custom Screen Wizard
Sector Rank= 1 to 40
EPS% >40
sales%>25
50 day avg volume>100000
(These criteria are 100% EPS and 25% sales during bull market)
Screen Name: Top40 sectors 40eps+25sales
This is a separate Top 40 sector 40/25 watchlist in Telechart.

These are the stocks I focus on. Together the three things give you only around 75 stocks to monitor. From that list anticipating breakouts or trading breakouts is easier. If you focus on the top 20 sectors it is unlikely you would miss big moves.
The other advantage of sector based strategy is it allows you to anticipate breakout and enter in anticipation. RKT and GYMB two breakouts bought recently came from such monitoring.


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