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Last week, I told you how my "Best in Breed" (BIB) model identifies sectors – and the strongest stocks within those sectors – that may not be on everyone's radar.
It's evident in this "page-view" world that, unless your name is Amazon Inc. (Nasdaq: AMZN), Facebook Inc. (Nasdaq: FB) or Netflix Inc. (Nasdaq: NFLX) or your market cap is heading to the magical $1 trillion level, you're going to have a tough time getting noticed.
I beg to differ.
It's often the overlooked that outperform. And if you can jump aboard before the stock or sector grabs headlines, you can ride the ensuing buying wave to even greater profits.
However, the BIB model takes this process one step further. Using proprietary indicators, it identifies sectors that are up-and-comers. They may not be outperforming the broader market quite yet, but strength is brewing.
My model looks inside the sector at individual company strength trends. When I see several of my indicators pointing in the same direction, I know the sector is on the cusp of breaking out.
And getting aboard at that point – before the outperformance – gives me even greater profit potential.
Last week, I told you how the biotech sector was outperforming the best of the major market averages – the Nasdaq and small caps.
This week's sector can't make such a claim… yet. In fact, it's lagging the performance of the S&P 500 so far this year, which itself is trailing far behind tech and the small caps.
But that doesn't mean we can't still make a killing…
About the Author
Chris Johnson is a quant - he's obsessed with building and perfecting mathematical models that allow him to predict, with startling accuracy, the direction of the markets, entire sectors, and individual securities. For the last year, he's been researching and building a new system that lets him move swiftly in and out of the hottest stocks in the market for life-changing gains - entirely on his own terms. The results of his newly-minted Night Trader system are nothing short of amazing.
Chris also contributes to Money Morning as the Quant Analysis Specialist.