Industry & Sector rankings

[Raindrop]

Hi All,
This forum is more serious than other forums on internet so I thought I put out a question for you all.

What do you think about Industry & Sector rankings, does chances of picking a winners increase when you select a stock from a high ranking sector? Specifically, what source do you use to obtain sector ranking & rotation information?

I have been looking at different web sources and their rankings differ from each other, sometimes quite a bit.
If you do not want to post your source on the forum, then you can send me a private message.
Thanks.

[skiracer]

Hi All,
This forum is more serious than other forums on internet so I thought I put out a question for you all.

What do you think about Industry & Sector rankings, does chances of picking a winners increase when you select a stock from a high ranking sector? Specifically, what source do you use to obtain sector ranking & rotation information?

I have been looking at different web sources and their rankings differ from each other, sometimes quite a bit.
If you do not want to post your source on the forum, then you can send me a private message.
Thanks.

absolutely true. the highest ranked industries and the highest ranked sectors in those industries will provide the best stocks to look at for setups. not that you wont find good setups in other areas but you wont find the best setups in the worst industries and sectors thats for sure. try www.barchart.com for rankings and top stock rankings in those industries and sectors. good luck.

[steelman]

Raindrop,

I learned that you should do a Top Down Analysis. Which means, find the trend of the overall market first. If it is trending up, then find the best sectors and industries and then find the best stocks in those. Your chance of that stock going up will be much greater. I have noticed when you choose a solid stock in a strong sector they tend to pop more on "up" days and they more often than not, hold their own on the "down days"...if you are long.

I use Investools and it has Photography (29.2%), Textiles-non apparel (20.7%), and retail-apparel (16.7%) as the top 3 performing over the last 6 weeks. Coal and Metal mining had the 2 best of the week and of today as well.

Best,
Steelman

[skiracer]

steel, is investools a free site?

[dmk112]

Steel - That's a good approach. I think Stan Weinstein uses that method as you probably know he's a market wizard.

[peanuts]

I don't normally narrow my searches to industries, but when I have done it in the past, I've used MarketWatch:

http://www.marketwatch.com/tools/industry/default.asp?bcind_compidx=&bcind_period=1wk

[mrmarket]

I prefer looking at individual stocks.... but there is no question that institutional money rotates into sectors and, as a result, stocks from the same sectors will move together.

At the end of the day, I look for earnings. If earnings begets sector rotation, that's fine. I don't really mind being too early or too late - as long as I buy into a company that has great earnings potential. If I do chances are it will be in a pretty good sector as well.

[skiracer]

I prefer looking at individual stocks.... but there is no question that institutional money rotates into sectors and, as a result, stocks from the same sectors will move together.

At the end of the day, I look for earnings. If earnings begets sector rotation, that's fine. I don't really mind being too early or too late - as long as I buy into a company that has great earnings potential. If I do chances are it will be in a pretty good sector as well.

i don't think that you can rule out finding good setups in an out of favor sector or industry. you will always find exceptions to the rules. but i do strongly believe that looking at the strongest industries and sectors will enchance your chances for finding stronger setups. i also believe that timing is another key element and that finding a strong stock in a strong sector that has already made the strongest part of its move is going to get you in late and at the wrong time at a higher price.
understanding that the trend is your friend and following market trends are as significant as finding the strongest sectors and industries. it has to be a melding of all the essential ingredients and applying your discipline where it provides you with the biggest edge to obtain your goal whether it be long or short. dialogue like this is a great starting point for gaining and accepting those concepts to build a trading base for a strategic discipline to begin forming. without that base and discipline i dont think anyone can be successful over the long run.

[IIC]

I use vectorvest Real Time Industry groups and follow the Groups du Jour...And I ignore groups such as photography and textiles...nothing there as the groups are too small.

Put the leading stocks from the group(s) in your streamers and watch the group(s) chart(s).

For longer term investors which probably 99%+ of you are...I still suggest groups...however, you should fully understand how your provider ranks them...For example...IBD ranks their groups based on 6 month performance...Now, even for you intermediate termers...Doesn't 6 months seem like arather long time for a group ranking?

Best, Doug

[skiracer]

I use vectorvest Real Time Industry groups and follow the Groups du Jour...And I ignore groups such as photography and textiles...nothing there as the groups are too small.

Put the leading stocks from the group(s) in your streamers and watch the group(s) chart(s).

For longer term investors which probably 99%+ of you are...I still suggest groups...however, you should fully understand how your provider ranks them...For example...IBD ranks their groups based on 6 month performance...Now, even for you intermediate termers...Doesn't 6 months seem like arather long time for a group ranking?

Best, Doug

excellent point doug and very true. that's why i use barcharts.com. they are current and each of their sectors shows the exact stocks in it and they change it on a very current basis as their basic ratings change.

[IIC]

excellent point doug and very true. that's why i use barcharts.com. they are current and each of their sectors shows the exact stocks in it and they change it on a very current basis as their basic ratings change.

When I get some time I will post some other ones that people can use for free...Doug

[riverbabe]

paired trades

I prefer looking at individual stocks.... but there is no question that institutional money rotates into sectors and, as a result, stocks from the same sectors will move together.

At the end of the day, I look for earnings. If earnings begets sector rotation, that's fine. I don't really mind being too early or too late - as long as I buy into a company that has great earnings potential. If I do chances are it will be in a pretty good sector as well.

It's not always that stocks from the same sector move together. For example, Ford and Toyota. A paired trade in the sector would be long F and short TM. It's fun to look for obvious pairs like these, but I wonder how often they actually occur.

[steelman]

steel, is investools a free site?

Ski,

I think it's around $25-$30 a month. I paid for some online classes and have attended some local workshops and the the Investools website was included with the investor education classes. I know TD Ameritrade bought Investools. Investools wants a person to trade with thinkorswim because it has a more user friendly trading platform for options and $5 stock trades.

[steelman]

Bucy

$$$MM$$$,

Speaking of great companies and great earnings....have you seen BUCY lately? I knew it would come back around. Will it hit $75??? I hope so for the new streak. I did pick up some April 65 calls at the beginning of Feb for $2.00

Thanks for the picks $$$Mr. Market$$$,

Steel

[Raindrop]

Thanks for all your replys.

I have noticed the same thing about groups as someone mentioned it above. Like one web site ranked the photography in top 3 groups (only 4 stocks in that group) and other web site did not have the Photography group at all. And another website had the computers divided into more groups than the rest.

Then there is difference in how a rank is calculated and over how long period of time. For example Prophet.net ranks the groups by the rate of change of group's relative strength but Barchart ranks by relative strength only (and not the rate of change).

So i wanted to get some input before I decided on a source of information. Some people swear by IBD group rankings but after Doug's remarks, I'll skip IBD rankings for now.

Thanks again.