This Is What I Mean By Leading Stocks In Leading Industry Groups

Sample Report

A few days ago, I provided a sample of our Weekly Market Report (WMR), which is sent to our EarningsBeats.com members on Mondays. Below is a sample of our Daily Market Report (DMR), sent out to members on Tuesdays through Thursdays. A very brief market update is sent out on Fridays.

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Executive Market Summary

Our major indices were lower overnight, but reversed when initial claims unexpectedly roseThat rise in claims quickly drove the 10-year treasury yield ($TNX) lower, aiding stock futuresCommodities are jumping today as silver ($SILVER, +2.71%) moves within 2% of its recent high closeThe dollar ($USD) reversed yesterday after moving higher in prior sessions, likely adding to the interest in commoditiesCrude oil ($WTIC, +0.23%) reversed yesterday as well; any move higher from here will meet a lot of congestion near $82 per barrelToday’s equity strength currently is centered in real estate (XLRE, +1.81%) and utilities (XLU, +1.12%), two defensive sectorsTechnology (XLK, -0.18%) is the only sector in negative territory at this time as computer services ($DJUSDV, -3.16%) is weighing on the groupAirbnb (ABNB, -6.62%) is one of the worst S&P 500 performers after reporting quarterly results; ABNB has broken beneath recent price support at 155 in an overall deteriorating travel & tourism group ($DJUSTT)

Market Outlook

The only time during the last 12 years that I suggested it was a good time to sit it out was heading into 2022 and just before one of our worst cyclical bear markets hit. Otherwise, I’ve suggested that anyone investing for the long-term stay the bullish course and remain long. Of course, the ultimate decision is entirely yours. We provide our guidance based on our own independent research and signals, but it’s always up to you. We can’t take on your risk and we are not privy to your personal financial situation and risk tolerance. It would be foolish for us to attempt to manage anyone’s money, and it would also be ill-advised since we are not Registered Investment Advisors and are not licensed to do so.

As a quick refresher, if you’re natural tendency is to want to short the stock market, I’d simply put this up next to your computer screen as a reminder of what the stock market does over time. Then decide if you’d be better off with a positive mindset or negative mindset when it comes to U.S. equities:

This is why I feel it’s important to ignore the news and follow the charts. There are always reasons why the stock market is about to plummet. That’s one constant that never changes. To be a successful investor/trader, you need to be able to look objectively at the stock market and only hunker down when most signals line up bearishly. In my humble opinion, that’s not the case right now.

Sector/Industry Focus

Here are several industries that are breaking out to new highs or threatening to break out – all amongst our 5 aggressive sectors – XLK, XLY, XLC, XLI, and XLF. When I talk about trading leading stocks within leading industry groups, this is how you begin the process. Find several of the best industry groups:

Internet ($DJUSNS):

Broadline Retailers ($DJUSRB):

Banks ($DJUSBK):

Investment Services ($DJUSSB):

Full Line Insurance ($DJUSIF):

Heavy Construction ($DJUSHV):

Electrical Components & Equipment ($DJUSEC):

ChartLists/Strategies

Ok, so if we truly remain in a secular bull market and the recent period of selling/consolidation is drawing to a close, how do we find individual stocks to consider for the next leg up in the stock market. Well, first we know that the above industry groups are strong right now and strengthening. Defense ($DJUSDN) and aerospace ($DJUSAS) were not shown above, but are two other industries really strong now. Second, let’s run a scan of stocks with SCTRs above 90 (excellent relative strength) that reside in the above industry groups. I’ll add a minimum average volume filter and run this scan against our Strong Earnings ChartList (SECL) and Raised Guidance (RGCL) – you can run this scan against the entire stock population if you’d like. But by including our SECL and RGCL, we know that these companies are strong fundamentally in addition to their technical strength:

…..and the results sorted first by SCTR, then by industry group:

These are 27 companies with excellent relative strength (based on the high SCTR score) that belong to those industry groups showing excellent strength. These stocks are the collective “poster children” of “leading stocks in leading industry groups”.

Earnings Reports

Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Thursday, May 9:

BN, CEG, TAK, SLF, MTD, TEF, RBLX, WPM, TU, ARGX, PBA, WBD, EDR, WMG, RPRX, AKAM, H, EPAM, VTRS, SUZ, BAP, RBA, PODD, USFD, GEN, EVRG, CRL, NTRA, SOLV, ONTO, TREX, TPR, DBX, HRB, MARA, NXST, PLNT, FOUR, HAE, FROG, INSM, TSEM, SYNA, ALRM, VCTR, CLSK, YETI, YELP, SG, VERA, TGLS, NTLA, DNUT, PLUG, SOUN, NTCT, WRBY, VITL, CSIQ, CARS, SBH, ZIP

Friday, May 10:

ENB, CRH, DOCN, ROAD

Economic Reports

Initial jobless claims: 231,000 (actual) vs. 212,000 (estimate)

Happy trading!

Tom