Chicago, IL – September 25, 2012 - Stocks in this week's article include Encore Capital Group, Inc. (NASDAQ: (ECPG - Snapshot Report) , Crane Co. (NYSE: (CR - Analyst Report) , Pinnacle West Capital Corp. (NYSE: (PNW - Analyst Report) , Elizabeth Arden, Inc. (NASDAQ: (RDEN - Snapshot Report) and Toll Brothers Inc. (NYSE: (TOL - Analyst Report) . Kevin Matras goes over the new Top Sectors and how to use them in your own trading.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
It's that time again. Every few months, I like running this screen to find the new Top Sectors. And since roughly half of a stock's price move can be directly attributed to the group that it's in, it is important to stay on top of this.
By definition, a strong Sector or strong Industry will have more of its companies moving higher than a weak Sector or weak Industry. What's interesting is that just getting into an average stock in a strong group will often outperform the best stocks in a troubled group.
This doesn't mean you can just pick anything and you'll make money. Far from it. But it illustrates how powerful the underlying group is to the success of your stock picking.
There are several ways you can define the best Sectors or Industries.
One of my favorite ways is to look at the percentage of stocks trading within 10% of their 52-week highs.
Currently, the top 5 sectors are:
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