Stock Market Leaders and Laggards
Leaders are stocks that breakout immediately when the market confirms a new rally. In the first several weeks, strong stocks with leadership ability will breakout on volume above their 50-day average. Some of these stocks will breakout on the largest volume ever. Typically, newer stocks that have come public in the past few years will have the most strength for sizable gains.
As multiple stocks breakout from similar industry groups within larger sectors, a confirmation of broad leadership is established. "Sister Stocks" will usually move in crowds and lead the way in similar fashion. Their charts will show some resemblance and their action with be closely related. When one leader goes up, so will the others in the group. It's not an exact science but almost anyone could chart the progression of leaders during the beginning stages of a rally.
Laggards are stocks that don't breakout immediately when the market confirms a new rally. They become laggards if they wait a few months to finally breakout while dozens of other stocks have already gone on to excellent runs. Investors must be on the lookout for a healthy correction after several strong months of advancement within a specific industry group or broad sector. As the correction materializes, the original leaders will be poised to continue their run so long as the 'M' in CANSLIM is still positive. 'M' stands for market health.
Investors must be on the lookout for stocks that only start their advancement on the overall correction. These stocks tend to be weaker and are more prone to failure. The original leaders will have more institutional support and are more likely to advance further. Laggards will often sport a nice breakout during the correction phase, only to disappoint the investor with a reversal.
Let's use a hypothetical example: XYZ breakouts out in October and runs up 50% in 3 months and then pulls back to correct. ABC breakouts out 3 months later in January while the correction is taking place (from the same industry group) but has been stagnant the past 3 months as many other stocks in the industry groups have made nice gains (like XYZ).
Laggards stay stagnant during the beginning stages of bull markets. This doesn't mean that they can't have a nice run, it just means that the chances for failure are higher because "dumb money" may be bidding up the cheaper stock in that particular group.
The "smart money", otherwise know as institutions may have ran up stock 'XYZ' for 3 months and will most likely allow weak holders to sell before they resume the advance. In the mean time, those weak holders may be the investors running up stock 'ABC' because it looks cheap. They may reason that it should be moving up because 'XYZ' moved up in the prior 3 months.
Finally, be careful and analyze each specific stock and situation before you make a commitment. This is a general rule to help you select a leader within a strong industry group. The market never works perfectly every time so make sure you are prepared for anything.
About the Author
Chris is the founder and CEO of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.
Should You Consider Investing in Enhabit (EHAB)? Yahoo Finance
Opinion | The Best 50-Year-Old Investing Advice Money Can Buy The New York Times
1 Great Reason to Invest in the Stock Market Right Now The Motley Fool
Short-Term Investments Can Increase Reward and Decrease Risk Kiplinger's Personal Finance
Investing in Bonds vs Stocks: Ideas for 2023 Morgan Stanley
Investing for the next decade Franklin Templeton
Boring is Beautiful in Investing A Wealth of Common Sense
2 Solid Dividend-Growth Stocks Investing.com
DeFi sparks new investments despite turbulent market: Finance Redefined By Cointelegraph - Investing.com
DeFi sparks new investments despite turbulent market: Finance Redefined By Cointelegraph Investing.com
Action Plan: What Part Of November Don't You Understand? Investor's Business Daily
Critical Investing Mistakes Investors Should Avoid Right Now The Motley Fool
Real estate investing takes on a new focus for the under-40 crowd Therogersvillereview
SPY: What is “Active Investing”? StockNews.com
Top ranked advisors say these are the 3 biggest investing mistakes people make during recessions - CNBC
Top ranked advisors say these are the 3 biggest investing mistakes people make during recessions CNBC
Motley Fool Investors Look Back at 2022 and Forward to 2023 The Motley Fool
Opinion: Ron Baron explains his investing philosophy with goal of doubling his money every 5 to 6 years - CNBC
Opinion: Ron Baron explains his investing philosophy with goal of doubling his money every 5 to 6 years CNBC
10 Common Investing Mistakes That Can Easily Be Avoided Kiplinger's Personal Finance
Foresight Autonomous earnings missed by $0.05, revenue topped estimates By Investing.com - Investing.com
Foresight Autonomous earnings missed by $0.05, revenue topped estimates By Investing.com Investing.com
10 Best European Companies To Invest In Yahoo Finance
One of the World's Richest Investors Just Sounded a Big-Time Warning for Wall Street - The Motley Fool
One of the World's Richest Investors Just Sounded a Big-Time Warning for Wall Street The Motley Fool
2 Stocks to Be Grateful for This Thanksgiving Investing.com
How To Invest Like Warren Buffett: 3 Simple Rules - Apple (NASDAQ:AAPL), Coca-Cola (NYSE:KO) - Benzinga
How To Invest Like Warren Buffett: 3 Simple Rules - Apple (NASDAQ:AAPL), Coca-Cola (NYSE:KO) Benzinga
JEPQ ETF: Low Volatility Approach To Growth Investing Seeking Alpha
1 No-Brainer Stock to Buy Right Now for Less Than $100 The Motley Fool
8 Biggest Risks of Fixed-Income Investing GOBankingRates
Week Ahead: Investors Eyeing Battered Consumer Sector Investing.com
Vatican Tells Catholics How to Make 'Faith-Consistent' Investments The Wall Street Journal
3 Investing Megatrends You Can't Afford to Miss The Motley Fool
2 Investments to Buy No Matter What Happens in 2023 The Motley Fool
The Worst Mistake Moderna Investors Can Make in 2023 The Motley Fool
Investing in Rewind Andreessen Horowitz
China Is Investing Billions in Pakistan. Its Workers There Are Under Attack. - The Wall Street Journal
China Is Investing Billions in Pakistan. Its Workers There Are Under Attack. The Wall Street Journal
The fear of missing out can be a killer for investors. Here's how top-ranked financial advisors keep it at bay - CNBC
The fear of missing out can be a killer for investors. Here's how top-ranked financial advisors keep it at bay CNBC
Investing in These 2 Tech Stocks Now Could Be a Genius Move The Motley Fool
Tesla, Manchester United rise premarket; Activision Blizzard, Apple fall By Investing.com - Investing.com
Tesla, Manchester United rise premarket; Activision Blizzard, Apple fall By Investing.com Investing.com
Devon Horace on Nike, the Trail Blazers and investing - Portland Business Journal - The Business Journals
Devon Horace on Nike, the Trail Blazers and investing - Portland Business Journal The Business Journals
Investing in Equals Andreessen Horowitz
Where to Invest $10,000 in a Bear Market The Motley Fool
Occidental Petroleum investing heavily in low carbon future Midland Reporter-Telegram
Crypto's collapse leaves investors with less to be grateful for this holiday season - The Spokesman Review
Crypto's collapse leaves investors with less to be grateful for this holiday season The Spokesman Review
This Week's Best Value Investing News, Podcasts, Interviews (11/25/2022) The Acquirer's Multiple
The Big Secret Wall Street Will Never Tell You About Investing The Motley Fool
Investing Platform Public Announces Global Launch Yahoo Finance
Grom Social Enterprises earnings matched , revenue fell short of estimates By Investing.com - Investing.com
Grom Social Enterprises earnings matched , revenue fell short of estimates By Investing.com Investing.com
5 Falling Stocks Investors Didn't Expect on Black Friday The Motley Fool
Will Jumia Stock Pay Off Big for Investors? The Motley Fool
Investors pump almost $16bn in to US corporate bond funds Financial Times
This seasonal investing strategy is 100% accurate in the past 35 years — here are this year's stocks to consider buying - MarketWatch
This seasonal investing strategy is 100% accurate in the past 35 years — here are this year's stocks to consider buying MarketWatch
It Is Never Too Early To Start A Roth IRA!
The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits, one dealing with your compensation and the other dealing with your contribution.
Boost Your Income With Financial Spread Betting
About 6 years ago I started to notice that certain friends of mine had quit their jobs but continued to live very luxurious lifestyles - seemingly without doing very much. I thought they must just be using up their savings until I discovered they were all making a fantastic living by spending just a few hours a week doing something I had never heard of before - "financial spread betting".
A Gadfly On A Dinosaurs Butt, Or The Hood-winking Of The American Investor
Have you ever noticed how some words in the English language are so perfectly named for what they describe? And how some words seem to be, I guess you could say, backwards? For instance, the word sunflower! How wonderfully aptly named is the sunflower, that beautiful yellow flower that follows the sun from sunrise to sunset.And then there are those words in the English language where there meaning appears to be backward, so to speak - like parkway and driveway.
Raising Capital in Today's "New Economy"
We've helped a number of clients develop business plans and raise capital from "angel" investors, corporate entities and venture capitalists during the last 6-8 years. It's always a daunting process that can be full of pitfalls and require a tremendous amount of work - but it can be done! Here is some perspective gleaned from years of experience.
June 2005: Weather Forecasts for Weather Traders
If Johannes Kepler, the renowned 17th century astronomer and discoverer of the planetary laws of motion, could speak from the heavenlies, he might have a few words of wisdom to share with the National Weather Service. Although Kepler's name is not normally associated with meteorology, he was quite the weather forecaster in his day.
Creating a Financial Future--Putting Your Plan Into Action Part 2
Real Estate can be a useful tool for investing. The simplest real estate investment is not truly an investment, but a cost-reduction - that is owning your own home.
Is Offshore Banking for You?
You've probably heard about people who keep their money offshore. Most likely you assume they're all wealthy businessmen; millionaires, who have so much money they somehow 'qualify' to move it out of the country, right? Wrong! Offshore banking can be a benefit for anybody regardless of income.
The Basics of Tax-Free UK Financial Spread Betting
Financial Spread Betting (or Trading) offers a tax free method of speculating on financial markets.Quite simply, if you think a particular index, share, commodity, currency or sector will rise, you place an UP bet.
Success Trading: More Basic Terminology for New Traders
One important aspect of trading the markets is to understand how to feel it's overall pulse. In the stock market, this is measured by measuring the movements of selected stocks across various sectors to let us know how the market is doing in general.
Investing As A Sport?
I said last week that money doesn't generally buy happiness, but the lack of it can buy absolute misery. This, by the way, is not just my personal observation.
What My Horse Had For Breakfast
Let's see, he had some oats, fresh alfalfa and his vitamins. I know from the mixture that is great food and he will win the seventh race this afternoon.
Stock Market Retirement Investment Plan
For a successful retirement investment plan to work in the stock market, some 'reasonably sure' assumptions would have to be made:The retirement investment plan must take into consideration the one prevailing constant in any stock market security - risk and uncertainty. Understanding that risk and uncertainty are the key factors that propels the return on investment in the stock market far beyond the returns of Passbook Savings Accounts, CD's or Bonds are a start.
Guru Focused: Robert Olstein's Short Sells
While it is rather rare that value gurus sell stocks short, Robert Olstein has been selling short in his Financial Alert Fund. The accountant-turned fund manager spots values by looking behind the numbers.
Planning Starts with the Basics
When developing a plan for your finances, the toughest question often is: "Where do I begin?" Before investing in stocks and bonds or buying life insurance, before implementing any change or making any decisions, you first need to analyze and understand your entire financial picture. Two documents allow you to do just that.
Going Against the Conventional Investment Wisdom
First of all, I want to give everyone the disclaimer that I am not a registered financial advisor and I don't play one on TV. Therefore, I cannot legally provide financial advice and I will not do so.
Expand Your Pool of Investors for Your Company
If you own a company that sells complicated products and you want more investors, consider having topics on your web site that discuss the background needed to understand your products and your company. For example, if your company specializes in producing and researching monoclonal antibodies, post articles discussing exactly what monoclonal antibodies are, how they are produced and what research your company is engaged in.
Understanding The Real Rate of Return!
There is one indicator more than any other which determines the health of an economy and it is the Real Rate of Return.Furthermore this is the simplest of all indicators to understand because it determines the safety of assets.
Invisible Mutual Fund Fees Erode Your Returns!
Many investors think that investing in mutual funds is free. What nonsense! Funds collect more than $50 billion a year in fees from investors.
Let's first understand what maniacmeans. According to Webster a maniac is "mad;raging with madness; raging with disorderedintellect".
How to Terror-Proof Your Money
"To drift is to be in hell, to be in heaven is to steer." -GeorgeBernard ShawFormer Homeland Security Director,Tom Ridge, has said it's not a matter of "if"we'll have another terrorist attack, but when.
|home | site map|