How to Use ETF Holdings to Find The Strongest Stocks

Watching the major indices gives us a solid sense of the market’s overall health, finding the leading stocks helps when you are aiming for outperformance

This blog will help you use Deepvue’s ETF holdings feature to stay on top of market rotation while focusing on strength with performance ratings and rankings.

By looking through a broad lens first, and then concentrating on the strongest sectors, you will be on the right path to discover outperforming stocks.

Why a Top-Down Approach Works

As a stock trader, we always want to be on the right side of the trend. Many traders analyze the movement of the overall market by watching the indices and various ETFs, in addition to the individual stocks.

A top down approach starts by looking at the overall market first, then the sectors, and finally the individual stocks.

For example:

• If the NASDAQ is leading, tech names usually start running.
• When the S&P 500 is stronger, cyclical stocks get more attention.
• A breakout in the IWM means small-cap stocks are heating up.

Once you understand the overall theme in the market, it becomes your job to find the outperforming stocks. Using ETF holdings will help refine your focus.

How to Narrow Your Focus to the Best Stocks

There are thousands of stocks out there. So how do you find the best of the best? Follow this simple 3-step process:

1. Begin by monitoring the indices to analyze the overall health of the market.

2. Compile a list of ETFs and sort by relative strength. Regularly examine an ETF watchlist to stay in tune with the strongest outperforming sectors & industries.

3. Zoom in on the leading stocks. Once you know what sectors & industries are performing the best, it becomes your job to find the strongest stocks.

How Deepvue Helps You Scan ETF Holdings Fast

Deepvue makes it simple to identify strong sectors and the top stocks within them. Here’s how to use the platform step-by-step.

1. Create an ETF Watchlist

Deepvue continuously creates and updates preset watchlists that you can reference and use as your own. When making a new Watchlist, check out the Presets available to you.

Here is the ETF List we use: ARKF ARKG ARKK ARKQ ARKW ARKX BBH CIBR CLOU DRIV ERX FDN FFTY GDX GDXJ GLD HACK IAT IAU IBB IBLC IBUY IDNA IDRV IEO IGV IHAK IHI IJH IRBO ITB IVW IWM JETS KRE MDY OIH ONLN PAVE PPH QLD ROBO RTH SLV SLX SMH SSO TAN TNA USO XAR XBI XHB XLB XLC XLE XLF XLI XLK XLP XLU XLV XLY XOP XRT MSOS

2. Sort By Absolute Strength Rating

Deepvue’s column settings can be customized to your personal preference. You will want to familiarize yourself with various performance ratings like Absolute Strength and Relative Strength ranked 1 to 99 (99 being the strongest).

We recommend adding the Absolute Strength Rating and sorting by high to low will help you find the strongest sectors and industries quickly.

3. Check the ETF Holdings for the strongest sectors

Easily discover what stocks are in any given ETF by clicking on the “H” icon next to the ticker. A new list of names appears displaying all the Holdings of that specific ETF. Let’s see what this looks like when we click on the “H” next to the ETF SMH.

You will now see all the stocks that are in the that ETF. When the new list of names appears, you will also see a new column titled % Holdings indicating the weighting of each stock. If you are trading ETFs and not necessarily looking for individual stocks, this feature will help you see which stocks make up (weigh) the most in that ETF.

From there, sort the list however you want—by strength, volume, or any other key metric. If you’re trading the ETF itself, this view also tells you which stocks carry the most weight.

To return to your watchlist, just click the X in the search bar.

Putting it all Together

Always keep in the back of your mind that the majority of stocks move with the overall market. When a group of similar stocks begin to move in tandem, they will support each other during an uptrend. It is our job to find the strongest stock in the strongest sectors and industry groups.

1. Curate a Watchlist with only ETFs (Take advantage of Watchlist Presets)
2. Create a column set that contains your desired performance rankings
3. Sort ETFs based on recent performance
4. Click the “H” icon to see what stocks are in the ETF
5. Now sort the stocks looking for the top movers

Using a top down approach when selecting stocks involves analyzing the overall market, finding the best performing industries, and finally the leading stocks. Look at the bigger picture first, then narrow down your focus.

Concentrate on the strongest industries that are outperforming the market, then identify the leaders in that group.

By utilizing Deepvue’s ETF Holdings functionality and performance rankings you will be on the right path to find the strongest stocks using this top-down approach.