You are likely trading the WRONG stocks.. For the last few weeks, all I've done was: -Focus on strong themes (Semis, space, memory) -Buy these names on pullbacks into the EMA's -Hold these winners & don't sell too early Once these start building bigger bases, now you are going to look for rotation into emerging themes. How to know where to look? 1. Start With Relative Strength Emerging themes always leave footprints. Youâll notice: -Certain groups stop selling off during weak markets -They recover faster than indexes -Multiple stocks in the same niche begin moving together -Volume starts increasing across the sector For example: $IGV was making new highs while $QQQ was still below the previous all time highs This showed relative strength in the ETF, and software stocks began to emerge with strong setups 2. Scan Weekly Charts First You will start noticing that when almost every stock in a sector is setup on the weekly timeframe.. and explosive move follows. Emerging themes usually appear first on: -Weekly bases -Weekly breakouts -Multi-month consolidations For example data centers recently.. all had a massive weekly base 3. Follow Volume Closely Volume is one of the clearest signs of institutional participation. You will start noticing: -Highest volume EVER print -Accumulation volume patterns -Low volume sell offs -A breakout with expanding volume often signals real demand This tells you that institutions are piling into the trade 4. Watch for âCharacter Changesâ One of the earliest clues is a change in behavior. Examples: -Stocks stop failing on breakout attempts -Pullbacks become shallow -Names begin closing near highs instead of lows -Weak sectors suddenly start holding moving averages A new theme usually starts with: -Better closes -Better reactions -Better continuation before the headlines catch up... For example $PLTR and $HOOD in the last few days.. starting to act much better and changing their characters. 5. Track News Narratives Themes are often tied to macro narratives: -AI spending -Government backing -Defense budgets Follow themes, and stocks that have a REASON to go higher. For example drone stocks last week, after the news that the government might take a stake... Now this becomes top watch. 6. Focus on the Leader (Most important) Every theme usually has: -a leader -secondary names -laggards The leader is where institutions concentrate first. Your goal is to find the strongest theme, the strongest sector, and the strongest stock in that sector. Characteristics of a leader: -breaks out first -has the best volume -holds moving averages best -reacts strongest after pullbacks Most importantly... stack probabilities Theme + Catalyst + Setup + Leading stock = super performance
