My general rule for portfolio construction is ~90% allocation in leaders (relative strength, holding highs, clean trend), and ~10% in contrarian bets (hated, under-owned, fallen out of favor).
It's way more likely that strong stocks will continue to get stronger, than for weak stocks to get strong.
3 ways to find the leaders:
1)
> go to finviz -> maps
> click themes on the left
> filter to 1 month
> see strongest theme
> click into theme to find strongest individuals names
> add to watchlist
2)
> scanner (can keep it simple)
> scan for stocks making new 52 week highs (or within ~5% of highs)
> over key moving averages
> with good volume confirming the move
> best if it's been a somewhat steady move up
> also can just use ETFs to monitor sector strength like I talked about yesterday
3)
> use a prompt (perplexity, claude, chat)
> type:
- find me US stocks showing the strongest relative strength right now. Focus on stocks near 52 week highs, above the 20/50/200 day moving averages, with strong volume, clean uptrends, and leadership within strong sectors. Exclude low float junk and illiquid names.
This is NOT a "buy at insane extended moves" though...this is about monitoring strength, seeing where money is flowing, and making a plan to join the trend.
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