My Rule: Relative Strength First, Setup Second—Always
I shared the quoted tweet 3 weeks ago, sorted the 15 stocks via RS strength. Note that $Microsoft(MSFT)$ ranked 2nd in RS despite a modest 1-month gain of just 1.93%, 7th in 1-Month % gain ranking.
The following is the 1-Month % gain sorted from biggest gainer. I put an * behind if they were not captured in my top 7 RS stock earlier.
$Palantir Technologies Inc.(PLTR)$ +44.76%
$Strategy(MSTR)$ +36.27%
$Netflix(NFLX)$ + 23.84%
$Coinbase Global, Inc.(COIN)$ +17.82%* (Note: 7.3% ADR)
$Robinhood(HOOD)$ +15.91%
$Microsoft(MSFT)$ +14.91%
$Tesla Motors(TSLA)$ +8.98%
The first step in pre-market prep is identifying relative strength—or weakness, if you're trading inverse setups—before diving into charts or screeners. A clean technical setup can still be a laggard if its peers have already broken out and run, eg. NFLX vs $Spotify Technology S.A.(SPOT)$ after 10 straight sessions out of base.
Outperformance requires positioning ahead of the prevailing consensus and narrative shifts, and you definitely should not chase if you have already missed the move.
"What changed everything for me was recognizing that I’d been chasing setups long after the best entry was gone.'' - David Ryan, 3 time US Investing Champion 1985,86,87
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