The trend is your friend… you just need to know how to find it!
As traders, it is easy enough to fall in love with certain stocks as the years go by. The danger of this is that our favorite stocks and sectors aren’t always going to be “in play.”
For example, technology has been one of our favorite sectors to trade this year; however, we only enjoy trading technology when it is setting up for our ideal entry. Rather than force the trade and break our rules, our mindset is to trade anything that fits our criteria and ignore anything that doesn’t.
While technology has offered many profitable opportunities for us over the last few weeks, we’re heading into the weekend with the group too extended for us to take new entries (chart below). While we wait patiently for a pullback in technology there are a few other trending sectors setting up at the buy zone right now.
One of our favorite sectors is healthcare — XLV. This has one of the better trends in the market and we took an entry this week in the Compounding Growth Mastery as it pulled back to the 21 exponential moving average (EMA) with a brand new daily squeeze. Charts within the group such as UNH, LLY, and others are setting up nicely here and could provide a nice set of opportunities over the next few weeks.
Another favorite of ours is the financials — XLF. This is an example of another great trend finally presenting a fresh daily squeeze at the 21 EMA. We’ll be keeping an eye on setups on GS, JPM, and MS for entry opportunities in the weeks to come.
In this Sunday’s video, we will walk through our process of identifying the best sectors and trends to swing trade. Just as important we’ll show how to find the best setups within each sector. Trend, structure, and momentum are the only things we want to focus on as traders. Once you know how to consistently find the best combination of “the “big three” — trend, structure, momentum — the game gets a whole lot easier.
We’ll see you in Sunday’s video!
Stay Focused!