A comprehensive guide on how to use sector rotation as a trading strategy, how to perform top-down analysis, and how to use a stock screener and technical analysis to identify potential trades.
Sector Rotation: The concept of sector rotation, which involves shifting investment assets from one sector of the economy to another. How to identify stocks with the greatest chance of following through.
Top-Down Analysis: The importance of top-down analysis, which involves looking at the market as a whole rather than focusing on individual stocks. This approach can help traders identify trends and avoid common mistakes.
Stock Screening: Pete demonstrates how to use a stock screener to identify stocks that have made a new 20-day high and have increased by at least 2% from the open. He emphasizes that these stocks are likely to be where the “smart money” or institutional investors are moving.
Technical Analysis: How to use technical analysis to identify breakout stocks. He explains that these stocks are likely to have large green candles, indicating strong buying pressure.
Sector Analysis: How to analyze sectors to identify which ones have the most stocks meeting the criteria. He shows that the communication services sector has the most stocks that are up, have increased by at least 2% from the open, and have made a new 20-day high.
Semiconductor Stocks: Pete identifies semiconductor stocks as potential trades based on his analysis. He shows that two of the top twelve stocks meeting his criteria are in the semiconductor sector.