The Beginner's Guide to Finding Explosive Stocks Using Sector Rotation

The Beginner's Guide to Finding Explosive Stocks Using Sector Rotation

Introduction (0:00 - 0:48)

Welcome and invitation to subscribe/comment
Overview of today's topic: Sector Rotation

Sectors vs. Industry Groups (0:48 - 1:48)

Defining sectors and industry groups
Importance of drilling down to find hot trades

Navigating to the screener
Setting criteria for liquidity and movement
Identifying the strongest sector (Communication Services)
Narrowing to strongest industry group (Internet Content & Information)

Finding Breakout Candidates (4:32 - 9:18)

Looking for 20-day new highs
Filtering for positive closes and 1%+ gains
Analyzing charts for breakout setups
Importance of candlestick patterns and breakouts

Identifying Smart Money Trails (9:18 - 12:15)

Screening for 2%+ intraday ranges (big green candles)
Combining 20-day new highs with big ranges
Semiconductors emerging as a hot industry group
Potential semiconductor trade ideas (TSM, NXPI)

Conclusion (12:15 - 12:48)

Recap of the scanning process
Importance of practice for successful trading

Introduction:

Sectors vs. Industry Groups:
To find the hottest stocks, it's crucial to understand sectors (broad market categories) and drill down into industry groups (sub-sectors). This allows you to pinpoint which areas are experiencing smart money inflows and maximum upside potential.

Finding Breakout Candidates:
Scan for stocks making new 20-day highs as an indicator of building momentum. Further filter for sustained intraday gains of 1%+ and analyze charts for clean breakout patterns above resistance levels. Identify early entries before major moves.

Identifying Smart Money Trails:
One telltale sign of institutional smart money interest is a stock with a wide intraday range (2%+) and a strong closing price. Combining this with new highs highlights stocks experiencing committed buying from deep-pocketed traders.

How to Scan for the Top Stocks to Buy Using a Sector Rotation Trading Strategy. In today's episode of Stock Trading for Beginners we review my step-by-step process for finding stocks to buy now.

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.

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These YouTube stock market live stream videos are for financial education purposes. It's up to you to consult your financial advisor to make the final decision before you decide which stocks to buy

[terrysummer]

Thanks for a terrific video Pete. It appears that I will probably be the first trillionaire in my family but I will never forget the good folks who guided me there ;)

[dzeenkdobblety]

by far the best video on leading sectors. I was struggling with that. Thx !!

[alexanderinsubordinate]

I like this video, it is exactly what I have figured out for my self over the last 4 months. The only thing I would add is, I sometimes start by doing the 20 day high scan for the entire stock market and look for which sectors most frequently pop up.

[yaadiparmar]

thanks for sharing your knowledge and expertise with us.

[steveryan]

The Last Semi-Conductor search was awesome, , , & best of all you gave it away... will subscribe Thank U

[valmirpaixao]

Hi I'm from Brazil. I'm starting with USA stocks and your videos was the best ever. Thanks

[pradeep]

This is the video I was looking for screening the stocks. Thanks Pete.

[omarnunez]

Thanks Pete for the amazing Screener and your knowledge. Greetings from Peru

[tomjung]

Why haven't any of the experts been able to show this to me? It's so easy. Thank you

[peculiar]

Thank you this changed the game for me

[mikeolson]

Member of boot camp last October and following you every day. This is the best Finviz training I've seen so far.

[SAmusicUncut]

For the uninitiated (like I was) this information has to be the biggest light bulb moment ever!! No more staring at charts and wondering..what do I trade next?! Thanks Pete

[joanpinol]

Really useful! Thank you so much for this video! The main thing of this is to try to be in the sectors that are strong and forget about the weak. Regards from Barcelona!

[pedronunez]

thank You Pete..This is one of the best videos i've seen...

[ericgrinwis]

Lovely insight mate, different stock sectors are in a bubble. But the question is when, or if this bubble will pop. I'm curious for the safest means to make plus interest regardless of stock market trends?

[josephszpek]

Hi Pete, thanks for this video! I sat in my office this morning and noted all the steps and criteria by scrolling back repeatedly to be sure I have it right. I will be going through this routine every day to get my eyes on the right stuff! I have known for months I needed to get this task done an finally it is and I feel so much better today, Thanks for all your knowledge. Happy Sunday

[josephszpek]

Hi Pete, Today I Finally set aside time to watch this video multiple times to both review the notes I took when I watched the first time about a month ago and just go through each step so I can make this process quick and easy each day. I realized that I just need to do more of the right stuff and this step will keep me out of bad quick trigger trades. There comes a time in every trading journey when you just through up your hands in frustration from poor results over and over and one needs to do something different if you ever expect to see different results. Pretty much the same for anything in this life. Thank you so much for all the free content and you passion to help.

[pbmartin]

Hey Pete great vid, will keep watching

[TC-srqf]

Great video. Most of the people I follow on Twitter, who are really good swing traders, really only post about tech stocks. I suppose it's mostly because of the high ATR, but lately that sector has taken a hit, and so I've been hearing people talk about being patient and "waiting for your market". Meanwhile, lumber is limiting up every day it seems like. I feel like the info you are sharing is what is lacking in most trader's strategies. Thanks so much for sharing your process with us!

[markkangas]

This video is fantastic! I wonder, being that it may be a little dated, if it still is an efficient way of searching for the right stocks. I have a small account under $1, 000.00...way under..., but still have eeked out a few bucks since starting a month ago. I'm going to go back to watch this a few more times, and start applying next week. Thank you Pete, wish me luck.
Oh btw, I'm 60, kind of a dummy, and a good listener. This will work well with your order volume video I just watched too.