Why is this important? Similar stocks tend to move together, although there can be great differences between the leaders and the laggards in a particular group.

You stack the odds of success in your favor when you trade stocks from leading industry groups. Find the best stocks within those groups in terms of earnings, sales and price performance, and now you really have an edge. This is especially true in swing trading , where your goal is to capture solid profits in short bursts.

The more factors in your favor, the better. You typically don't have time to wait for a potential star from a lagging industry group to capture Wall Street's attention. You need a stock to perform now, without the baggage of bumbling rivals. When we screen stocks for IBD's SwingTrader , we always sort our candidates by industry group rank.

We want to make sure we give our full attention to those groups leading the market, especially those in the top To be sure, some of our best stocks have come from leading groups, such as Freeport-McMoRan FCX and Silver Wheaton SLW , both from the mining sector.

Gold and silver miners have claimed the top industry spot for more than six months. IBD subscribers can find the top industry groups every day on the General Market Indicator page, which always is linked from the Big Picture and the Market Trend landing page.

You can also find group rankings on the IBD Data Tables page. The group has had short pullbacks followed by powerful moves, making it a ripe group to look for reversals.

Barrick Gold ABX and Randgold Resources GOLD have been basing for the past month and are both hovering around the day moving average. A rebound back above the moving average in above-average volume could usher in another potential move. The stock has seen quick, short moves on prior breakouts over the past few months. The stock is back above its 5-day line, and if the move continues, it could offer another breakout around Look for volume to track more than 1.

With watch candidates, make sure to wait for proper price and volume signals before execution. While it can be tempting to jump on a moving stock to gain a few extra pennies of profit cushion, the fact is premature buying more often leads to a lower batting average and unnecessary losses.

25 Stocks Day Traders Love

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