How to Find Bullish Sector Stocks in a Bear Market
Investors may feel the pain of a bear market in today's financial sector but it can be a great opportunity to find tomorrow's hot investments if you know how to find bullish sector stocks in a bear market. While most stocks will follow the overall downward trend of a bearish stock market, there are always a few sectors that show strength that can emerge into a potential windfall for anyone who can spot them once the market turns bullish again.
Other People Are Reading
Instructions
-
Invest in Tomorrow's Leaders
-
1
Go to the public library or nearest bookstore and grab a copy of the Investor's Business Daily edition. Go to the market section and begin looking up the "Strongest Industries" section in the paper. Mark down the strongest industry in the stock market along with Relative Strength rating or RS. The RS rating is a comparative indicator that scores segments of the market between the weakest performing and the strongest performing.
-
2
Look at the "Strongest Sectors" section and then write down the strongest performing sector along with its RS score. Make sure that the strongest performing sector is a component in the strongest performing industry.
-
-
3
Go to Yahoo! Finance and look up all the stocks that make up that sector and begin writing them down. Begin going through Investor's Business Daily and looking up each stock symbol while marking down the RS value of each stock within that stock sector.
-
4
Pick the highest RS valued stocks and then create a stock watch list. Pick the top three RS rates stocks as potential investments when the market turns bullish. These stocks will have proven themselves to be the most resilient at resisting the downward bias of the bear market and are set to lead the next bull run in tomorrow's stock market.
-
1
Tips & Warnings
Once you have your stock sector selected by the RS value, you could take it a step further and break it down into stock sub-sectors. The strongest stock sub-sector will further filter out the strongest stocks most likely to lead to outsized gains in the next bullish stock market.
When it's a bear market on the scene and the stock market is in decline, avoid rushing in to invest. Stock sectors rotate in leadership, meaning that until the market turns bullish another stock sector could emerge as the next leader. It's always best to have a list and keep track as to where strength is showing in the stock market before rushing out and investing your money. Be patient and you will reap the benefits of proper stock sector selection.
