• Much of a stock's move is due to the strength of its industry. You want to own stocks in industries that are displaying strength and market leadership.
   
• Different industries move to market leadership as economic conditions and consumer trends change. You can identify the new leaders by watching IBD's 197 Industry Group Rankings and the top five industry sectors with stocks making the most new price highs.
   
• The stocks you buy should be in the top 20% of industry groups, that is, groups rated "A" in IBD SmartSelect® Corporate Ratings. It's even more significant when the industry group has been moving up the industry prices table. "B"-rated stocks may also have potential.
   
• The table of new price highs can also provide good insight on which industries are drawing interest among professional investors.

Related Resources:

Click here to get the 7 Steps For Selecting Winning Stocks, according to the CAN SLIMTM Investment Research Tool.

Go to the Investor's Corner Archives to read IBD's "editor picks" of classic Investor's Corner columns.

Search our archive of Ask Bill O'Neil Q & A's organized by topic.