Yes, definitely my thing for trading. I guess it's like some who only trade in bull markets, in the main, I really only want to be a sector that has tailwinds or perceived tailwinds just around corner...so the rush of volume/$ starts to lift all involved.
Obviously, you can't buy the whole sector individually, so that's where you can hone in on your best targets.
I think it does depend on the overall mood of investors whether they all get a lift from Large Cap to Micro, so that's up to us to decide where to focus even further, the micro caps in this market might still struggle due to cashflow/ cash issues.
Also, you can have trends within a sector, so lets take Gold which has played out well to my thoughts in late Nov/early Dec 2018.
GOLD - big sector Theme - I mentioned best to focus on Australian producers with leverage to current AUD Gold price rather than just USD. USD Gold was ticking up, but it was mainly a play also in currency as DEC $AUD GOLD was $1660. Those with higher AISC would also likely get best leverage - the marginal producers.
I think the best plays have been local producers or near mine goldies in OZ. RMS, DCN, GOR etc But within that I had GCY which did 30% on first wave, then died on under performance at minesite..
RSG - Hybrid - Big African expansions so USD and also OZ production...did not nearly do as well as those above WAF - Pure African - all USD - hardly moved.
There's obviously lots of different performances in this 2 months from WCN hero to zero spike to NCM doing near 25% and adding $8B to cap.
I think the STT thread has always tried to anticipate the next sector tailwinds and then trade within. There have been so many over the years, in the main they last 3-6 months, some like Uranium was a monthly Flash in January a few year ago and to say RTOs/shells can be great for couple years.
So it's a macro view first, EV revolution to product/commodity/service Break the sector down further to themes (maybe location or currency changes etc) Break the companies down to Large/Mid/Sml Break them down further by EV/ Cash/ Producer/ Explorer/ Revenue/ pre-revenue Select your best 3, maybe 1 from each level or where you like to play cap wise.
One thing I have learnt over the years, is don't discount the big end of town as these can equal small end over a longer period if sector has legs. Ie: KLA has done about 70% on this gold rally.
Main 2 themes last few months - Gold and Fintech? Then the hard part, hold, add, sell, exit. Find the next one...Uranium, Lithium. Zinc, Cybertech, China Ag, Water, East Coast Gas....who knows.
I see Haplo has suggested Lithium for example and chart evidence that it is ticking off bottom trend again. I'm looking at Zinc/Lead/ Nickel and starting to watch Oil again.
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