So using the “OABOT” (in development) I wanted to demonstrate how I was able to come up with a few ideas for strong industries.
First You press a button to update the data based upon the most recent FINVIZ data available:
Then I wanted to focus on industries with a large number of stocks that have been categorized into risk cycle types (I selected those with 35 or more per industry).
Next I wanted to look at the metrics provided which include breadth, average individual stock score (before adjusting for group score which provides bonuses for the stock being in favorable industries), and a weighted score that combines those factors.
Finally, I looked for stocks that either had a high enough absolute average of individual stock score OR a high enough weighted score and 35+ individual categorized stocks, then sorted them by their average individual score and limited the names to a handful.
From here it is useful to look at what “risk cycle” the industry is predicted to be in and then “what’s next” in the cycle. Note: Many of the industry don’t have enough stocks in each category to provide reliable information for the time being, the OABOT will still make a “guess” but I will only be listing those which have enough sample size to provide a guess I am confident in.
NOW… you have 3 industries with plenty of stocks telling you what is working and what is next.
And the list
From there we can narrow down the list a bit manually.
Then we can have OAbot sort from highest score (adjusted for things including what’s working in terms of market cap, industry strength, risk cycle classification in the market, what’s working in the industry and sector, and many other things) to lowest score.
Here are the 1000+ adjusted score for the stocks I manually selected
There are other features. You can plug it into portfolio management tool listing a stop and target to compare risk reward on eligible candidates and determine which offers the best R/R,or you can run a position size simulator, or you can sort by any number of many categories among others.
I hope to automate some of this process a bit more so I don’t have to do sorting and comparing and such from the anticipatory group to the “what’s working” scores. By integrating the information it will require less effort to identify the top industries that also have enough stocks to be relevent. A lot of this will need to be updated to provide a large “anticipatory boost” automatically and I want to generalize “quality and momementum” into “early stages” category “laggard” into a middle stages category and short squeeze and trash into a late stage category. This will be in addition to the anticipatory scores but it will help me get more stocks actually graded with an anticipatory boost where I don’t otherwise have enough relevant information.
But beyond that the next phase needs to adjust risk cycle classification based upon the industry so they can be compared on more of a relative basis rather than just how they are compared to the highs. Then I will have two ways to sort of confirm the OAbot’s prediction of “what phase” of the risk cycle each industry is in. This will prevent the greatest moving industries from having a bunch of quality and momentum stock and be able to find which ones are taking longer OF this particular group. I also will run through anticipatory boost for all the other categories I used when coming up with the individual score based upon what “groups” are working.
I have a lot of other plans in store for the OAbot but for now it still functions to assist meIf you enjoy the content at iBankCoin, please follow us on Twitter