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

1. A first wave of market leaders emerge and build bases in a stairstep fashion, as in the Humana example. 2. Stock set-ups proliferate while the original leaders give up relatively little ground and rebound fairly quickly from any sell-off. Leading stocks will generally advance 15 to 20 percent and then rest, during which time they may pull back 5 to 10 percent. 3. The majority of leaders should hold their ground. Even though there are bound to be some stocks that emerge and then fail, you don’t want to see most of the leaders that broke out come crashing down and not able to rally. 4. Volume on the major averages should also be watched for signs of distribution. If this is accompanied by increasing volume on down days versus up days, it may be too early, and you may need to revert back to cash for protection.