Off of this brief oversold dip we may get a few new leaders to emerge. I want to look for stocks either up on the week or day or both that are rising on above average relative volume. This suggests that either on the dip these names didn’t sell off and may lead the next wave higher, or remain strong, and there is buying demand.
I picked these finviz labeled industry groups
Semiconductor – Integrated Circuits
Drugs – Generic
Drug Manufacturers – Major
Internet Information Providers
General Building Materials
Education & Training Services
Semiconductor – Broad Line
Multimedia & Graphics Software
Specialty Retail, Other
Rental & Leasing Services
Semiconductor – Specialized
Then I reduce that to the stocks in these groups with possible triangles and falling wedges that show some consolidation developing especially over the last 1 month to week.
Then I look at risk classification dynamically. If the group is lagging over the last 6 months, I only want to look at 1s. If it is average to lagging I’ll look at 1s and 2s. If it’s leading I’ll look at 4s and 5s. If it is average to leading I’ll look at 3s and 4s. If there is an error returning information I’ll still include it.
That narrows the list.
Of those I might look more into these based upon how the charts look and monitor them over the next week or two for an action point or trigger: