A leading stock constantly outperforms the broader market and reports stronger technical and fundamental metrics than its industry peers. To achieve success in the markets, focus & find leading stocks quickly to outperform the market.

There is no single indicator that can pinpoint a leader, but some strategies can guide you to the strongest stocks.

The dominant stocks of the current market cycle are increasing in price more rapidly than others and reporting strong reoccurring earnings. The key to finding leading stocks is navigating the overabundance of information.

This blog will provide simple strategies to help you quickly find the leading stocks in the market.

Sectors, Groups, Industries

Nearly half of a stock's price move can be related to its sector and industry. Just like three out of four stocks follow the general market direction, strong performance by similar companies in the same group can have a positive spillover effect lifting each other's prices.

The Global Industry Classification Standard (GICS) is a framework that helps investors understand the key business model. At its core, the GICS is divided into eleven sectors:

Stocks are divided into 25 Industry Groups, 74 Industries, and 163 Sub-Industries.

Understanding industry classifications helps you identify stocks within a strong-performing group. The leading stocks will be elevated further when its industry peers are also top performers.

Deepvue Data Panel

The Deepvue Data Panel is a fully customizable interface that allows users to control the information displayed. Users can include any data to help gain a detailed overview of a stock's liquidity, fundamental metrics, and price performance.

When creating your unique Data Panel, add a category to include all of the GICS classifications. For each classification, click the down arrow to expand a menu that includes Relative Strength and Relative Measured Volatility.

With the click of a button, you can see the top 10 stocks in each of the GICS classifications. When you are scrolling through charts screening for strength and come across a promising chart, check to see how the other stocks in the same group or industry are acting.

Look For Strength: Focus on groups where there are multiple stocks with RS ratings of 85 or higher. The leading stocks have the highest RS rating in the strongest groups.

Avoid Weakness: In a weak general market, it is best to steer clear of groups with no strong stocks. If a strong stock is discovered but has no supportive peers, be cautious as the overall group may bring it down.

Navigating Your Watchlists

As you scroll through your watchlist keep the Data Panel with Industries expanded so you can see how each stock compares to the rest of the group. You can quickly see how the chart you are looking at stacks up against the other similar stocks.

All of the GICS classifications are clickable when incorporated within the column settings. You can simply click on “Systems Software” (or any other Sector, Group, or Industry) to view all the stocks in the Sub-Industry and quickly navigate through them.

Adding a Ranking or Rating to sort the stocks within the same group will help you focus on only the best stocks.

Leading Stock Screener Presets

Screening can become an overwhelming process for newer traders when learning the specific metrics that make up an elite stock. To streamline the process, Deepvue offers preset screeners to help build your watchlist.

In the Screener Preset section, type “Leader” into the search box. You will see Deepvue's own leadership screens in addition to other top traders' screening criteria.

Deepvue Leaders

This broad screen combines multiple OR groups to ensure the best stocks appear in one comprehensive screen. All stocks must be over $12.50, have a market cap greater than $1 Billion, an average Dollar Volume of $20 Million, and an Average Daily Range of 2%.

An OR Group requires only one of the criteria to be met to pass through the group. Each OR group filters out more stocks but is less restrictive than the initial AND group.

The Absolute Strength (AS) Rating Group 2 is looking for stocks with pure price performance on a weekly, monthly, or three-month time frame.

Group 3 is restricting the search to stocks with strong fundamentals including quarter-over-quarter earnings and sales, EPS surprises, or earnings and sales future estimates. If the fundamental growth is not yet ideal, having an AS Rating over 93 will keep the strongest stocks in the results.

Group 4 ensures the fundamental data is strong and looks for stocks that are reporting positive sales quarter-over-quarter and year-over-year.

Group 5 includes another layer. If a stock passes through the other groups we can narrow down the search to longer-term uptrends, young IPOs, or stocks with an AS Rating over 95.

Stage Analysis Leaders

This screen uses Stan Weinstein's classification to focus on stocks in uptrends during their stage 2 advance. Deepvue includes an OR Group to focus on the top 25 Industry Ranks in a three-month and 6-month time frame.

Liquid Leaders

This basic liquidity screen looks for stocks over $20 with an average dollar volume greater than $100 Million. To focus on the best, Deepvue includes an OR Group to narrow down the search to stocks with a three-month AS Rating over 87, or a one-month AS Rating over 93.

Putting It All Together

With all the tools available in Deepvue, you can easily narrow your search of the leading stocks by looking at the strongest stocks in the strongest sectors.

Use Deepvue's Data Panel to display all of the CIGS classifications to find the top-rated stocks in each Sector, Group, and Industry.

Streamline your search with the leading stocks Screener Presets that combine key metrics the help you build a watchlist of stocks that are outperforming the market.

Customize your approach by sorting your watchlist by Relative or Absolute Strength to focus on the best stocks.

Filtering out all unnecessary stocks will ensure the next leading stock is at the top of your watchlist.

Frequently Asked Questions