Traits of Stock Market Winners 9-6-23

The Market 📈

Tech stocks re carrying the baton, #QQQ #XLK. And impressively it’s without the popular stocks that we’d normally focus on. Although #META and #MSFT might have something to say about that today. 

And let’s not fail to notice the three week rally in #APPL, which faces a gap fill test of resistance today. A typical price level where sellers would come back for more. Pay attention to this battle of “price discovery” today.

#XLV Healthcare stocks are on the verge of a collapse. #CVS #MDT and #ABT dragging it lower. These stocks could be used as a hedge to hold bullish trades. Twenty six stocks meet the criteria for bears stacked order flow.

These stocks could be used as a hedge to hold bullish trades. Twenty six stocks meet the criteria for bears stacked order flow.

Traits of Stock Market Winners 🥇

– Before rapid price growth, most of the big winners had price/book ratios below 1, indicating market value less than book value. However, they did not necessarily have low P/E ratios, low prices, small market caps, or low betas.

– The stocks tended to have high and rising relative strength ranks and datagraph ratings before price growth. Their earnings and sales were accelerating in preceding quarters.

– Applying screens based on the common characteristics to a broader universe of stocks led to significant outperformance versus the S&P 500 over 1-2 years. The screens focused on positive earnings growth, accelerating earnings, price/book <1, and relative strength criteria.

– The screens selected companies that outperformed despite not targeting small market caps, low prices, or low P/E ratios like other documented effects. This suggests multiple ways to select outperforming stocks.

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