![]() Trading System : Stocks : ![]() Strong Stock In Index Breakout |
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Systems |
Strong stocks often indicate early when the broader market will turn or break out. I think some discretionary traders watch a major index for a break out and then pick a few stocks within the index having a high relative strength. That should be fairly easy to model. That is in the neighborhood of what I do. But the only problem is that when an index breaks out, it is because a larger portion of the stocks within it have already made enough of a move in that direction to offset the rest of the stocks in that index that are going in the opposite direction or trading flat. If one waits to buy the strong stocks after the index is breaking out, one finds that they are chasing the stocks that have already started moving as much as several minutes earlier. |