Scan for Pattern Rotations, In Addition to Sectors
Scan for Pattern Rotations, In Addition to Sectors
Jan 26, 2010
Many traders and educators talk about catching sector rotations – when money moves from one industry to another. Capitalizing on this kind of capital movement can make for great trades. Sometimes it’s difficult to ascertain what is moving. Additionally industry leaders may indeed begin moving, but laggards may not.
Another way to think of rotations is to consider not the stocks in the same industry moving, but stocks in the same pattern moving: Pattern Rotations.
Consider $GLD and $SLV: Both seem interesting to the long side recently. Rather than consider the entire metals sector as a destination for your capital, think of the pattern these stocks and others in any sector are sharing. It’s possible with a tool like Trade-Ideas’ Stocks Like This. Trading ETFs like $XLF and XHB? The same logic applies: find stocks that mirror the same pattern as the sector ETF.
It works like this: given the filter and alert characteristics of $GLD during a recent day in the market (from today to at least a week back), then find me other stocks like it – right now.
Simply indicate which filter characteristics and alert trigger(s) that we reported for $GLD by putting a check in the box and copying the chosen indicators into a new strategy that we already name for you: “Stocks Like $GLD”.
We think it’s a great on-ramp to the Trade-Ideas superhighway and its a great way to reverse engineer into a strategy given a stock you know you want to emulate.