Learn how to easily find the strongest stocks in the strongest sectors to buy, or how to find the weakest stocks in the weakest sectors to sell/short using FINVIZ and other free sites.
Many traders look to buy very strong stocks because they have proven they can move aggressively to the upside, as well sell/short very weak stocks because they offer big moves to the downside.
We can’t just buy and sell the strongest or weakest stock at any time, though. I show you how to find these “potential trade” stocks and then quickly zero in on the ones are providing trades, based on your strategy, right now.
Fine-tune the list even more by adding in additional criteria on the screener to suit your individual preferences.
This stock screening process is intended for swing traders (day traders may find it useful as well), and the strategies should be based on a technical approach. Look to capture a strong move over a short period of time, such as a few days to a few weeks. This is not an investment strategy.
The video below shows how to do, and I have included a summary of the steps and resources below the video.
How to Screen For Strongest Stocks in Strongest Sectors (double click on video to make it larger)
Resources and Steps for Finding the Strongest Stocks
Many traders like to buy stocks that are very strong. Once we have a strategy and valid trade setup for trading strong stocks (my method is covered in the Stock Market Swing Trading Course), looking at recently strong performing stocks can provide lots of trade candidates. Here are the steps on how to find them.
Finviz.com > Groups > Look at 1 week, 1 month and 3 month performance.
- Hone in on the sectors that appear near the top of all three time frames the most. Write down the top one or two sectors.
- Go to the Screener. Under “Sector” input one of your top performing sectors.
- Average volume over 1M (or at least several hundred thousands shares).
- Use Chart View to look at small charts of the stocks on the list. You can then quickly see if a stock would be suitable for your strategy.
- Use Performance View and sort by performance for various time frames to see the top performing stocks over that time period. Hover your cursor over a symbol to see a chart, or click on Chart View to see charts again (order will still be based on performance).
- Write down stocks that are near a trade level, AND write down stocks that you want to get into but aren’t near a trade area currently. Make your notes detailed so if you refer back to them in a few weeks you know what you were saying.
- Add the top performing Industry to narrow down the list even more (step below).
StockCharts.com > Free Charts > Sector Summary > Look at 1 week or 1 month
- Select the strongest sector from your research on Finviz, or simply click on the strongest sector over the last month.
- You will now see the strongest industries within the sector. Pick the top one or two industries and put them (one at a time) into the Finviz screener.
- I like Finviz for going through stocks because of the Chart View and sorting options. It makes panning through stocks for trading opportunities very quick.
You can analyze stocks on Freestockcharts.com, although I no longer recommend this site. TradingView.com is much better for free (or paid) charts.
Resources and Steps for Finding the Weakest Stocks
Just like we can look among the strongest stocks for long trade candidates, we can look among the weakest sectors and stocks for short trade candidates.
The process is the same as above, except this time we will look at sectors and industries on the bottom of the sector and industry rankings.
Once you have an industry or sector in the Finviz screener, then sort by weakest performers (weakest stocks at top of list). Then switch back to chart to view to see if any of the stocks align with your strategy.
Final Word on Swing Trading Strong and Weak Stocks
The video and steps above lay out a couple ways to find the strongest and weakest sectors, and the strongest and weakest stocks within those sectors. This is how some people like to find swing trading candidates. It can be effective, although we will still need to go through the charts and do the manual work of determining if a stock is near an entry point that aligns with our strategy. Before taking a trade we will also want to make sure that the potential profit justifies the risk. If the stop loss will need to be too big relative to what we can reasonably expect to make, then the trade should be skipped.
Write down stocks of interest. Even if they are not near an entry point right now, they may be in the future. Keep them on a watchlist and monitor them for future opportunities. There are certainly other ways of finding swing trade candidates, looking for strong and weak stocks is just one of them.
If you interested in learning a complete method of swing trading stocks, including how to find trades, how to manage risk, where to enter and where to exit, then check out my Stock Market Swing Trading Video Course. More than 11 hours of video shows you how to swing trade efficiently, in less than 20 minutes a day.
By: Cory Mitchell, CMT