Stock Market Leaders and LaggardsLeaders are stocks that breakout immediately when the market confirms a new rally. In the first several weeks, strong stocks with leadership ability will breakout on volume above their 50-day average. Some of these stocks will breakout on the largest volume ever. Typically, newer stocks that have come public in the past few years will have the most strength for sizable gains. As multiple stocks breakout from similar industry groups within larger sectors, a confirmation of broad leadership is established. "Sister Stocks" will usually move in crowds and lead the way in similar fashion. Their charts will show some resemblance and their action with be closely related. When one leader goes up, so will the others in the group. It's not an exact science but almost anyone could chart the progression of leaders during the beginning stages of a rally. Laggards are stocks that don't breakout immediately when the market confirms a new rally. They become laggards if they wait a few months to finally breakout while dozens of other stocks have already gone on to excellent runs. Investors must be on the lookout for a healthy correction after several strong months of advancement within a specific industry group or broad sector. As the correction materializes, the original leaders will be poised to continue their run so long as the 'M' in CANSLIM is still positive. 'M' stands for market health. Investors must be on the lookout for stocks that only start their advancement on the overall correction. These stocks tend to be weaker and are more prone to failure. The original leaders will have more institutional support and are more likely to advance further. Laggards will often sport a nice breakout during the correction phase, only to disappoint the investor with a reversal. Let's use a hypothetical example: XYZ breakouts out in October and runs up 50% in 3 months and then pulls back to correct. ABC breakouts out 3 months later in January while the correction is taking place (from the same industry group) but has been stagnant the past 3 months as many other stocks in the industry groups have made nice gains (like XYZ). Laggards stay stagnant during the beginning stages of bull markets. This doesn't mean that they can't have a nice run, it just means that the chances for failure are higher because "dumb money" may be bidding up the cheaper stock in that particular group. The "smart money", otherwise know as institutions may have ran up stock 'XYZ' for 3 months and will most likely allow weak holders to sell before they resume the advance. In the mean time, those weak holders may be the investors running up stock 'ABC' because it looks cheap. They may reason that it should be moving up because 'XYZ' moved up in the prior 3 months. Finally, be careful and analyze each specific stock and situation before you make a commitment. This is a general rule to help you select a leader within a strong industry group. The market never works perfectly every time so make sure you are prepared for anything. About the Author Chris Perruna http://www.marketstockwatch.com Chris is the founder and CEO of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful. |
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Boost Your Income With Financial Spread BettingAbout 6 years ago I started to notice that certain friends of mine had quit their jobs but continued to live very luxurious lifestyles - seemingly without doing very much. I thought they must just be using up their savings until I discovered they were all making a fantastic living by spending just a few hours a week doing something I had never heard of before - "financial spread betting". More and more people are now becoming familiar with the phrase "financial spread betting". Once, the sole preserve of City Whiz kids or sophisticated gamblers, financial spread betting is now gaining in popularity as a great way to earn a very sizeable tax-free income without the risk of losing the shirt off your back! So why is financial spread betting becoming so popular. Well, with a bit of understanding and practice, ordinary people, with no prior experience, can earn enormous sums whilst controlling their risks and limiting their losses. You do not even need a stockbroker or a city dealing account to do get involved. An on-line account is very simple to open and anyone with web access can do it. Spread betting, aka futures trading, is easy to understand if you stick to a simple index like the FTSE 100 or the DOW JONES. In basic terms, this is how it works: When you buy a 'future' you take a position on what you think the index (e.g. the FTSE 100, or the DOW ) will be at some future date - e.g. June 2005. Let's say the FTSE is currently at 5200 and you think it will rise over the next three months as 'terrorist fever' abates. You would buy the June FTSE at (say) �10 per point. For every point it rises, you make �10. If it goes up 100 points, you make �1000. Of course, if you get it wrong and the index falls by fifty points (say), you lose �500.00. You need of course to be very aware of the risks before you get involved. As with any investment or business, you can lose money. If, by nature, you are a timid, cautious person, then it is definitely not for you. But if you have some money to play with, and aren't risk adverse, then financial spread betting is the one of the best possible ways you can make a great deal of money completely tax free? and there are clever ways of limiting your losses so you never lose more than you can afford. Unlike most businesses, it is possible to get involved with an absolute minimal outlay and take a position without buying a single thing. You do have to 'back' your position with a certain amount of cash, but this is 'insurance' money, NOT stake money. The best thing is you can try it for free without any risk at all. You can 'dry trade' with 'monopoly' money until you get a feel for how it works and are confident enough to start using real money. Financial spread betting has become so popular primarily because of the relationship between risk and capital. It is highly leveraged and you can make huge profits with only a limited amount of capital and risk. The fact that there is (unlike with most investments) no stamp duty or tax also helps make it extremely attractive. So if you are of the right temperament, spread betting can be a very lucrative way of making an amazing income in your spare time. But be warned, if used recklessly or without the correct knowledge it can result in large losses. Gary Anderson Gary Anderson is the author of "Betting On A Fortune" the best selling book on how to make money from financial spread betting. To get a FREE COPY of Gary's course "7 Steps To Successful Spread Betting", visit http://www.spreadbettingsecrets.com | ||
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Shanghai Composite Index Falls By 8.3%Monday, 04 June 2007 22:51:54 GMT Written by Antonio Sousa, Currency Analyst
Shanghai Stock Market Falls By 8.3% The Shanghai Composite Index fell by 8.3% to close at 3,670 points, on speculation that the Chinese government could launch a new wave of tightening measures to cool down one of the hottest stock markets in the world. This was the lowest close since April and the market biggest decline since February 27 when the market fell by nearly 10 percent. Half of the index components went "limit down" by the mandated 10 percent including companies like China�s largest electricity producer Huaneng Power International which fell 19 percent and China Air which lost 1.07 Yuan. Last week, China�s Ministry of Finance stunned the markets by announcing a rise on stamp tax on securities trading to three yuan per thousand yuan of share values and in the last two decades, an increase in stamp duties, has always caused a plunge in the stock market. Still, other major Asian markets ended the day higher and both European and American markets were relatively stable on Monday. Chinese Manufacturing Sector reaches its best level in more than two years Growth rate of the Chinese manufacturing sector reached its highest level in more than two years. CLSA China Purchasing Managers� Index peaked at 54.1 in May, its highest level since April 2005 and up from 53.3 in April. The increase in the PMI can be attributed to increased bank lending, accelerated growth rate of output, rise in employment and new orders, as well as improved delivery times of suppliers. For the eighteenth consecutive month, output production was boosted, yet backlogs in production rose at the steepest rate in the past 20 months. The production data is indicative of economic strength, especially in the occurrence of demand dampening factors such as the eight-month high reached by input price inflation due to rising oil and steel prices. More than 12 percent of manufacturers registered a rise in export prices, hence suggesting the conclusion that that the global economy is not at the risk of exporting as much disinflation from China as in the past. The economic outlook is widely anticipated to spur the Chinese government into imposing a tighter monetary policy in order to prevent the economy from overheating. HKD gains against the greenback on Strong Housing Data The Hong Kong dollar appreciated against the U.S. dollar upon the release of data showing strong growth in the Hong Kong housing sector. The total consideration of sale and purchase of all types of building units rose by 3.1 percent on a month-on-month basis, and recorded a 35 percent increase on a yearly basis. On other front, the Chinese yuan weakened against the buck as speculation of further tightening of the monetary policy by the Chinese government pressed the Shanghai Composite Index down by 8.3 percent. There were no relevant economic releases today for Singapore and the SGD traded in a very tight range. |
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