Good afternoon.
I was wondering if anybody has found an effective way via Stockopedia to find the leading sectors, groups then down to stocks? I have tried a few different ways mentioned in previous posts but they don't quite seem to hit the mark for me.
Any advice or recommendations will be received with gratitude and interest
Merry Christmas to all.
"A wise person learns from their mistakes; an even wiser one learns from the mistakes of others!" Stocko Societas: https://discord.gg/QRhsHzFtbJ
Good idea...
ED - Would you be OK to have this topic (Stage Analysis) on the discussion board?
Stocko plays a huge part in my "Technimental" analysis and decision style.
I think this is very relevant given that a buy and hold strategy is under scrutiny by myself and others positing on Stockopedia. As an investor not a trader I would welcome a factor approach to momentum changes and potential breakouts.
It would be interesting but difficult to screen for. What is your definition of stage 1?
Would you say SCS (LON:SCS) has gone from Stage 1 to 2?
I seeing a lot of stocks with similar charts from around last October, especially in the retail sector.
It maybe worth looking at sectors and then the charts for each stock within it, you can do this on Stockopedia with the mini charts which I find very useful.
For anyone who does not know, here is the Basic Materials sector minicharts: https://www.stockopedia.com/se...
Minervini using this method? He said only about 50% work.
I'd call SCS (LON:SCS) a stage 1 > 2 from an inverted H&S base but lacking volume, too extended to buy as a breakout now anyway. On the plus side, there was a golden cross, and a classic pullback to the breakout level. At a glance, the forecast EPS looks weak and their cash reserves exceed the market cap so capital allocation could be better. I'm definitely missing something though as they score very highly on the Stockranks. That said, something's going on as it's in an uptrend, and there's been a bit of institutional buying. It's on the watch list, might be a good continuation buy.
I think we may be in the process of forming an upthrust atm so I would guess it will drop a little in the coming few weeks back to the 20wk MA. Will continue to watch. This is my chart of it atm...
I watched the video, funnily enough I have been using a similar method. On Tradingview you can screen for the weekly MACD to cross the zero line. This produces results around breakout and where the signal line is crossing the zero line on a Mansfield RS chart as in Stan Weinstein's book. Hopefully I have attched a couple of images.
Why look for the "leading sectors, groups then down to stocks"? Surely a better approach is to be contrarian? Why not look for the non-leading sectors? Momentum changes? What world do you live in? Share prices should move on the underlying fundamentals (eg profit growth etc). Look at the world. Form a view and invest accordingly.
For what its worth, I am a big bull of oil and mining stocks (for demand/supply reasons). Just buy big oil (Shell or BP) and big mining (Rio, BHP or GLEN) and sit back and don't worry.
Why do you say that a "buy and hold strategy is under scrutiny"? Says who?
Just browsing Stockopedia after a few glasses of wine. Reading your and XTR's messages makes me optimistic.
A number of posts over the last 3 to 6 months across different topics on Stockopedia have challenged the buy and hold/ coffee can approach. Even Ed is questioning whether to rebalance his NAPS portfolio every 6 months rather than annually.
Like you I am overweight in mining stocks and energy and hold the likes of Rio Tinto as long term investments but remain unconvinced that the coffee can approach generally is right for the rapidly changing world we live in.
N Brown (LON:BWNG) looks good technically, although about half of the volume from last week was on down days, but it's the fundamentals that put me off. Net debt is over 10x pre-tax profits, forecast earnings are declining, and as a retailer that offers credit facilities, they are sensitive to rates and inflation which I don't think are coming down anytime soon. They do score well on the Stockranks, particularly value but is this because of the ~£700M in assets, if this is inventory then it might just mean revenues are struggling?
My current UK sector comparison screen in TV. Baseline is set to BUKAC ticker (taken from (CBOE website)...
The idea is that you are stacking the odds of a profit in your favour. If you have two shares you are considering buying that are at similar points of a breakout, you would buy the one in the sector with the most momentum.
Mining and oil are certainly flooding in to some of my momentum screens, so hopefully as you say, sit back and relax.
I tend to trade only the UK market, but if you are interested in trading the US, you can take a look at stageanalysis.net and the stage analysis Youtube channel. Lots of market breadth info.
It was just an example of what came up on my screen, but I notice that online retail is actually one of the best performing industries in the last month. It will be an intesting one to follow, if the momentum in retail keeps going it could do well.
One I like the look of is Premier Miton (LON:PMI) This actually came up on a different screen I run (QM>90, recent volume surge)
wattanut
As a retired investment analyst/Head of research, I am a big believer in "fundamental analysis" and think that all technical analysis is a load of tosh! If looking to compare 2 stocks (eg Rio v BHP or Shel v BP) I will look at comparative charts. Also, if buying small stocks (of which I am a long term holder of several), I look at the SP charts for reference. But I would never buy anything based on charts alone.
My original post (written late last night after a few drinks) was partly tongue-in-cheek. A key element of my "investment style" is to heavily over and underweight particular sectors. Some input is from research I read (NB on commodities, I follow Gorozen research very closely). Also, wide reading on what is happening in the world. These support my heavily overweight positions in oil (18%) and mining (20%). I have zero weighting in financials simply because I find the financial statements too opaque and burnt my fingers several years ago with RBS and Lloyds.
In summary, what I am trying to say is that every investor will have his own "view of the world". My own view includes an expectation of higher oil prices within the next 12 months and a recovery in China (demand for metals). Oil price is too big a subject for here. Limited supply, increasing demand. So this is sector choice based on fundamentals. You don't need momentum screens for this approach.
Kuronagi
Hi Kuronagi
I don't disagree with you at all and it's great that you have such depth of knowledge of the market. As you say each to their own. These screens are just ideas to reasearch.
One of the points of Stan Weinstein's book (whether you agree with it or not) was that just because you have share with great fundamentals it doesn't necessarily follow that it will go up in price any time soon if it is in a currently unloved sector.
I hope you have a very profitable year.
wattanut
