Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market: How to Achieve Superperformance in Stocks in Any Market

by Mark Minervini

Each market cycle has a unique signature in the form of the price and volume action in leading names. Often a similar technical theme will be present. A growing number of stocks displaying positive, divergent price behavior during a general market decline can tip you off to where the next group of market leaders may emerge or what stocks are likely to blast off first when the market starts to rally. When you see this type of price action, it’s time to tune out the media and the gurus and concentrate on the facts: price, volume, earnings, sales, profit margins, new products, and positive industry changes. Look for the evidence stock by stock and employ the best criteria. Most of the time there will be more than just one stock in a particular industry group displaying this type of behavior. You should try to own the top one, two, or three names in the industry in terms of relative performance and earnings power. Look for the types of patterns and price action that are proliferating in the marketplace. This can help you understand what type of tactic will work best in the current cycle.