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How to Manage Your Portfolio Using Technical Strength vs Weakness

Leaders which are holding up the best during a broader market pull back are most likely to be the first to continue an uptrend when the rally resumes.

With that in mind you should strive to hold your stronger selections as long as they do not technically violate. Do this while paring back on any of your holdings which are technically violating, as those should be the first to be discarded.

As I explained in further detail in my latest webinar (slides below), you want to see how your stocks behave during a market pullback, and measure their individual technical strength or weakness. Simply put, stocks which are holding up are stronger than your stocks which are breaking down. Use this to determine your sells verse your holds, and prune your portfolio accordingly.

Stocks which are holding up the best include any which remain perched near recently made new highs, or are stubbornly holding at or above key support levels, such as their previous highs or 50 day moving averages. If any are pulling back, the daily volume on the descend would be un-alarmingly below average. Technically weak stocks are of course behaving with the exact opposite traits as there stronger counterparts.

As the distribution days have recently increased, so has our… 

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