How Groups/industrial sectors behave?

daken

Newbie
1 0
Reading "How to Trade in Stocks" in Livermore, in the chapter "Follow The Leader" he comments that the movement in the stock price of the same "group" industrial, will be similar.

From a very simple way, it more or less explains: "If the same primary reasons for rising U.S. Steel, the rest of the group of steel should also follow the same reasons."

As well, there are some leader groups, that command the market in general. As they go, everybody else tends to follow. In the time that was written, he cited the Steels, Aircraft, and plus two that I don't remember now.

After some reading, I began to realize about these "groups" and different sectors of each industry - their production features, profit cicles and so on. As a result, I observed that, some stocks are more sensitives than another. For instance, the food industry behaved stronger than automobilistic, in crisis period, and tends to have upward movements in the second semester of the year.

This aroused me some interest to understand, each of industrial sector/groups peculiarity, and how it's in the stock quotation (e.g.volatility, behavior upon a rose of oil, etc). Someone can tell me, or indicate readings, about general lines of the different groups?

The same way, what are the stocks that "lead" the market?
 

learn2tradewell

Newbie
6 0
Reading "How to Trade in Stocks" in Livermore, in the chapter "Follow The Leader" he comments that the movement in the stock price of the same "group" industrial, will be similar.

From a very simple way, it more or less explains: "If the same primary reasons for rising U.S. Steel, the rest of the group of steel should also follow the same reasons."

As well, there are some leader groups, that command the market in general. As they go, everybody else tends to follow. In the time that was written, he cited the Steels, Aircraft, and plus two that I don't remember now.

After some reading, I began to realize about these "groups" and different sectors of each industry - their production features, profit cicles and so on. As a result, I observed that, some stocks are more sensitives than another. For instance, the food industry behaved stronger than automobilistic, in crisis period, and tends to have upward movements in the second semester of the year.

This aroused me some interest to understand, each of industrial sector/groups peculiarity, and how it's in the stock quotation (e.g.volatility, behavior upon a rose of oil, etc). Someone can tell me, or indicate readings, about general lines of the different groups?

The same way, what are the stocks that "lead" the market?

Stock books are more useless than tits on a bore. There are certain times when certain sectors asre strong, which in turn leads to stocks in that sector showing strength. As an example I will illustrate the $XBI (the ticker symbol for a certain group of biotech stocks in the market). Let's go over the weekly and daily timeframe to show why it had such a great setup.

1) weekly


Where I have the arrow drawn as you can see is the an ideal entry point because the ETF consolidated and broke out higher

2) Daily


A lot of times before a sector breaks out, you can look to see which stocks in that sector are about to, or have the potential to breakout (or even breakdown depending on market conditions)
 
 
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