Finding Leading Stocks

Ummm… hello, MU. 👀

Another massive earnings report, and the chart is getting interesting.

Look at the highlighted setup in April. Now look at the right side of the chart.

Price tightened, volume dried up, and then buyers showed up before that huge advance.

Now MU is tightening again in the upper half of its base, with volume starting to return. This is exactly the kind of price and volume behavior I like.

I’m watching for a decisive move through the top of this tight range, backed by volume and follow-through.

MU, are we getting ready for another launch? 🚀

Every Market Cycle Has a “Big Stock.” But the Real Clue Is Usually the Industry Group Behind It.

The market’s biggest winners rarely emerge alone. They are usually part of an industry group benefiting from a powerful new fundamental trend.

2023: AI Compute and Semiconductors

This marked the beginning of a new bull market and the emergence of the generative AI theme.

Big leaders:

• $NVDA | Nvidia

• $SMCI | Super Micro Computer

NVDA became the face of the cycle, but the leadership was much broader. Chips, servers, networking equipment, and the entire data-center buildout were beginning to move.

2024: AI Software, Data Platforms, and Power

Leadership expanded from companies building the AI infrastructure to those finding ways to monetize and support it.

Big leaders:

• $PLTR | Palantir

• $APP | AppLovin

AI adoption spread into software, data platforms, advertising optimization, networking, and power generation. The theme was evolving, but the underlying driver remained the same.

2025: Memory, Storage, and the AI Data Stack

The market’s attention shifted toward the next major bottleneck. AI systems required enormous amounts of high-performance memory, flash storage, and data-center capacity.

Big leaders:

• $SNDK | SanDisk

• $WDC | Western Digital

• $STX | Seagate Technology

• $MU | Micron Technology

These became some of the market’s biggest winners as demand for AI memory and storage accelerated.

2026: The Memory Supercycle Continues

Leadership continued into 2026 and semiconductors remerged as a leading group rather than transitioning into an entirely new theme.

Leaders:

• $SNDK | SanDisk

• $MU | Micron Technology

• $STX | Seagate Technology

• $WDC | Western Digital

But don’t overlook what happened outside the dominant AI theme.

Metals and mining also developed into a major winning group during this bull market period 2024-2026. The market can have one dominant secular story while still producing powerful leadership in completely different areas.

The next monster winner probably won’t be random.

It will likely emerge from a strengthening industry group with accelerating earnings and sales, increasing institutional sponsorship, elite Relative Strength, and a chart that refuses to break.

2023: AI compute and semiconductors

2024: AI software, data platforms, and power

2025–2026: AI memory, storage, semis

Meanwhile, metals and mining proved that major leadership can still emerge outside the market’s primary theme.

What industry group do you think becomes the next true market leader for 2026–2027?

This Stock Had an 82 RS Rating Before It Ran 225%

One of the biggest misconceptions in momentum trading is that once a stock has a high Relative Strength rating, the move must already be over.

MRVL tells a very different story.

Back in April, the stock broke out of a six-month base. At the time of the breakout, its one-year RS rating was already 82.

If you missed the April 1 breakout on heavy volume into new highs, the stock offered another opportunity on April 17. It formed a tight area with a clearly defined level for placing a stop.

By then, its one-year RS rating had climbed to 90.

From the first entry, MRVL advanced roughly 225%.

From the second entry, it gained nearly 140%.

High relative strength did not mean the move was over.

It was evidence that the stock was already separating itself from the rest of the market.

I have always tracked the RS ratings of stocks at the time I purchased them in my model books, but I wanted traders to be able to study this for themselves, so I created a Historical RS feature.

You can now select any previous date and see exactly what a stock’s Relative Strength rating was at that moment.

What you will discover is that many of the market’s biggest winners already had RS ratings of 80 or higher before their largest advances began.

MU provides an even more dramatic example.

When MU broke out on April 22, its one-year RS rating was already 98.

The stock went on to advance more than 160% from that point.

According to the argument that high RS means the move is already over, MU should have had almost no upside remaining.

The exact opposite happened.

This is not simply something William O’Neil wrote about in How to Make Money in Stocks.

You can go back and see the evidence for yourself.

High RS does not tell you the opportunity is over.

Sometimes, it tells you the real move is just beginning.

The Old Leaders Are Waking Back Up

The strongest sectors and industry groups since the July 29 low are many of the same areas that led the market over the past year:

Technology

Semiconductors

Electrical Equipment and Parts

Computer Hardware

Electronic Equipment and Parts

Communication Equipment

These areas took a beating after major runs in many of their leading stocks.

We will see whether the market produces a follow-through day today or in the coming days, and whether these groups can reclaim their prior leadership.

Many of the former leaders, including SNDK, MU, BE, CIEN, and PENG, were hit hard and still have significant ground to recover.

But the areas that led before the correction are once again showing some of the strongest relative performance off the lows.

The Best Leaders Often Look Broken Before They Lead Again

A stock’s RS weakening does not automatically mean its leadership run is over.

Strong stocks rarely move straight up. They pull back, correct, build new bases, and sometimes look broken before beginning another major advance.

That is why I continue tracking many current and former leaders even after their weekly or monthly RS weakens.

Over the past year, we saw this repeatedly in semiconductor and memory stocks. Many pulled back to the 50-day moving average, found support, rebuilt their setups, returned to new highs, and made another substantial run.

Traders who immediately removed them from their watchlists missed some of the best opportunities of the year.

However, I would never buy a stock simply because its one-year RS remains strong.

That longer-term rating may still be reflecting what the stock accomplished several months ago. The weekly and monthly RS readings give us a much better picture of whether the stock is currently gaining strength, resting constructively, or beginning to lose leadership.

The real question is whether the stock is undergoing a normal correction within an intact uptrend or showing evidence that its leadership cycle may be ending.

RS alone cannot answer that.

You also have to examine the price structure, moving averages, volume, earnings and sales trends, industry group strength, and how the stock behaves during the pullback.

The current action in many former leaders is noticeably different from some of the earlier resets.

Since the tariff scare in the spring of 2025, many leaders following that recovery found support near their 50-day moving averages and eventually returned to new highs. Coming out of the March 2026 correction, many of the strongest names were also stocks that had led previously, but they generally held up better and did not look as technically damaged.

This time, many semiconductor and memory stocks have fallen below their 50-day moving averages, made lower lows, and moved closer to their 200-day lines.

That is a change in character.

It deserves more caution, but caution does not mean automatically declaring the move over.

MU is a perfect example.

It broke below the 50-day, made a lower low, and looked as though it might continue toward the 200-day. Instead, it repaired the damage, reclaimed its moving averages, returned to new highs, and eventually produced one of the best setups of the year.

The same thing could happen with some of today’s beaten-down leaders.

The goal is not to predict which ones will return. The goal is to keep them on the watchlist and let their price and volume action prove that institutional demand has returned.

Some will reclaim the 50-day, tighten up, rebuild sound bases, and become leaders again.

Others will fail to repair the damage and continue toward Stage 3 or Stage 4. New industries may also emerge and replace some of the groups that have led for the past year.

That is why flexibility and adaptability matters.

Do not become emotionally attached to the old leaders, but do not forget about them either.

Breaking the 50-day puts a stock into prove-it mode. It does not automatically mean the leadership story is over.

The Market Shift Was Hiding in the Screens

One of my favorite scans, and one I ran for years in MarketSurge, is the Big EPS and Sales screen. I now run the same scan inside the Momentum Trading Strategy software.

When you sort the results by one-year relative strength, the familiar leaders dominate: SNDK, MU, LITE, WDC, WTX, TER, etc.

The strongest groups are also the ones we have become accustomed to seeing: semiconductors, computer hardware, telecom, and communications equipment.

But sort the exact same screen by one-month relative strength, and the picture completely changes.

Now you see medical, biotechnology, pharmaceutical, oil and gas, and marine shipping names moving toward the top.

This shift was visible in the individual stock screens weeks ago.

When the indexes, sectors, industry groups, and individual stock screens all begin telling the same story, you are no longer guessing whether leadership is changing.

You are watching it happen in real time.

Leadership changes before most traders notice.

Run the Big Earnings and Big Sales screen, then compare one-year relative strength with one-month relative strength.

The shift is unmistakable.

Many of the stocks that dominated the last year still carry elite long-term RS ratings, but their short-term rankings have collapsed:

SNDK: 1yr RS = 99 / 1m RS = 2

AXTI: 99 to 1

MU: 98 to 10

WDC: 98 to 3

LITE: 98 to 10

CIEN: 97 to 12

At the same time, biotechnology, pharmaceuticals, software, and other emerging groups are moving toward the top of the screen.

That is what leadership rotation looks like in real time.

The market doesn’t send a memo. It leaves clues in relative strength, and industry-group rankings.

What Leader Is Still Standing?

The market looks ugly, but the individual stock scans may look even worse.

Many of the leading stocks from the past year have suffered meaningful technical breakdowns. With SNDK now confirming its breakdown below the 50-day moving average, it joins MU, STX, WDC, and a growing list of former leaders that have lost important support.

Since the market set its low on March 30 and began a new Stage 2 uptrend, which leaders are actually still standing?

Post a chart of a leading stock in a leading industry group that has not suffered a meaningful technical breakdown. Let’s see which former leaders are still holding up, if there are any.

Three New Research Panels Are Now Live

We added three new side panels to the Momentum Trading Strategy software this week: Historical RS, Institutional Sponsorship, and Surprises & Revisions.

Each panel is designed to provide an additional layer of research beyond the headline earnings, sales, relative strength, and fund ownership numbers you already see in the scanner.

Historical RS

The Relative Strength readings currently displayed in the software show a stock’s performance ending today.

For example, the one-month RS measures relative performance over the month ending today. The three-month RS measures the three months ending today, and the same applies to the one-week, six-month, and one-year readings.

The new Historical RS panel allows you to change the anchor date and see what those readings looked like at an earlier point in time.

For example, you can select one year ago and see what the stock’s one-month, three-month, six-month, and one-year RS readings were as of that date. You could also go back six months and see what the three-month RS looked like at that specific point.

The panel also displays the stock’s Weighted RS score, its Industry Group Blended RS score, and the company’s industry.

Institutional Sponsorship

We already displayed quarterly fund ownership, including the number of funds holding a stock and the quarter-over-quarter percentage change.

That allows you to see whether institutional ownership has been increasing or decreasing over several quarters.

The new Institutional Sponsorship panel takes the research one level deeper by showing the specific institutions involved in the stock.

O’Neil explained that it is not enough to know how many institutions own a company. Investors should also examine which institutions are involved, whether better-performing funds are participating, whether those funds have recently established positions, and whether the overall number of sponsors is increasing.

The panel gives you a clearer view of who is behind the ownership numbers and provides a starting point for evaluating the quality of that sponsorship.

A recognizable fund name does not automatically make the sponsorship high quality, but seeing the specific institutions involved gives you considerably more information than the fund count alone.

Surprises & Revisions

Strong quarterly earnings and sales growth remain the primary fundamental numbers we care about.

However, O’Neil also discussed the value of tracking earnings surprises and changes in analyst estimates as a secondary layer of research.

The new Surprises & Revisions panel displays earnings surprises, sales surprises, estimate revisions, and recent analyst upgrade and downgrade activity.

Some of the market’s strongest growth stocks can repeatedly report results well above expectations while analysts continue raising their future estimates. We saw this in names such as MU and SNDK during their strongest periods of earnings and sales growth.

That combination can help identify a company whose business is improving faster than the market originally expected.

Analyst upgrades and downgrades are also included because an unexpected change in opinion can sometimes act as a short-term news catalyst. However, these ratings should never be treated as standalone buy or sell signals. O’Neil repeatedly warned against blindly following analyst recommendations.

These panels do not replace the primary work of studying the chart, earnings and sales growth, price action, market direction, industry-group leadership, and the primary CAN SLIM criteria.

They simply give you more ways to dig beneath the surface and better understand the companies you are researching.

Stop Waiting for Someone to Hand You the Next Big Winner

If you are struggling to find the big winning stocks, you do not need to wait around for me or anyone else to tell you the names.

Open the Relative Strength Stock Screener and click the Leader / CANSLIM preset stock screen.

You will immediately see many of the market’s strongest names near the top of the list.

As you scroll through the list, some names will be extended. Those go on your watchlist so you can wait for the next proper pullback or setup.

Some will be near pivot points.

Some will already be actionable.

That is the entire point of the screener.

It is not there to overwhelm you with tickers. It is there to help you quickly identify where the real leadership is.

This is the same exact process I have used to find and share many of the biggest winners since January.

Names like:

SNDK

MU

AAOI

AXTI

DELL

CIEN

LITE

WDC

STX

SIMO

and many more!

Your job is to build the habit of checking the list, following the leaders, managing risk, and being ready when the setup appears.

Everything you need to learn the process is inside the Momentum Trading Strategy Course. I also provide a list of books that teach many of the same timeless principles.

Learn the process.

Use the tools.

Trust yourself.

You can do this.

Stocks gapping up to, or near, new highs this morning:

MU, WDC, STX, INTC, TTMI, TER, ALAB, AMD, VSH, LSCC, STM, TSM, and ADI.

Why Do You Keep Missing the Biggest Winning Stocks?

Most traders spend their time looking for stock tips.

The best traders spend their time looking for stock characteristics.

Strong earnings. Strong sales. Strong relative strength. Strong industry groups. Strong price action.

The funny thing is many of the biggest winners were not hiding.

MU. LITE. SNDK. CIEN.

They were displaying many of the same characteristics long before their biggest moves.

The challenge isn’t finding the information.

The challenge is having a process that helps you recognize it.

I just published a new article walking through the exact screening process I use to find potential market leaders.

If you’ve ever wondered how traders consistently find big winners while everyone else seems to discover them months later, this article is for you.

https://tradingmomentum.substack.com/p/how-i-find-the-biggest-winning-stocks

Put MU in the Model Book

Big earnings. Big sales. Big ROE. Big margins.

MU checks nearly every box that has defined many of the market's biggest winners.

• EPS Growth: +756%

• Sales Growth: +196%

• ROE: 39.8%

• Pretax Margin: 67.7%

• Relative Strength: 98–99 across multiple timeframes

• Fund Ownership: Increasing quarter after quarter

This is what institutional accumulation looks like.

Strong fundamentals. Strong sponsorship. Strong price action.

The Multi-Bagger Irony

A lot of stock newsletters sell people on the hope of finding the next multi-bagger.

A 100%, 200%, or 300% winner.

Many talk about holding for years to get the big returns.

What people don't realize is this:

By the time you figure out they were full of it, they already made plenty of money selling you the hope.

The funny thing is, I don't even teach or claim to give people multi-baggers.

But many investors would likely get similar or better results by learning how to identify true growth stock leadership, proper setups, institutional demand, and strong price action.

Here are a few names I mentioned in January and early February:

• AAOI +302%

• AXTI +294%

• SNDK +249%

• DELL +214%

• MU +160%

• LITE +155%

• CIEN +147%

• STRL +127%

• STX +126%

• WDC +124%

• INTC +101%

• AMD +101%

These were discussed in the paid subscriber chat and watchlist posts.

But to be clear, this is not what I do here.

I'm not telling you to blindly buy a stock and hold it until it becomes a multi-bagger.

The goal is to teach you how to find leadership, manage risk, identify proper entries, and build a repeatable process.

The Market Gave the Green Light

On April 8, the market gapped up above the 50-day and 200-day moving averages on a follow-through day.

That was the green light to start participating again.

Many traders ignored the signal.

Then they complained that there was “nothing to buy.”

Then, after the strongest names started moving, many said the move had already happened and the stocks had already left without them.

But that was not true.

MU was one example I gave that was still setting up on April 22.

ARM is another example of a later mover that gave traders plenty of time to participate.

After the market confirmed strength, ARM began building momentum, tightened up, held key moving averages, and eventually made a powerful move higher.

This is why following a proven process matters.

The market gave the signal.

Leading stocks showed up before, during and after the market moved.

There were plenty of opportunities for traders who were prepared and knew what they were doing.

This is why we built the Momentum Trading Strategy Course and MTS Software.

The course gives you the foundation.

The software helps you find the leaders.

Stop wasting time guessing.

MU Breaks Out Again

I’ve been talking about MU since January.

And now we have another breakout to new highs.

Why have I liked MU?

Same thing I keep saying over and over again.

• Big earnings.

• Big sales.

• Amazing return on equity.

• Strong margins.

• A hot industry group.

• One of the strongest stocks in that group.

• Aligned with the current bull market theme.

• Fund ownership also continues to increase quarter over quarter.

Yes, there have been higher-performing relative strength stocks on a pure price basis.

But when you combine fundamentals and price action, there are not many names that come close to MU.

This is not about chasing random names.

It is about identifying super performance characteristics, tracking the leaders, and staying aligned with the strongest stocks in the strongest groups as long as the evidence remains intact.

MU continues to check those boxes.

The Leaders Were Hiding in Plain Sight

Back in January, when I first started sharing names, SNDK, MU, STX, and WDC were some of the stocks I kept coming back to.

Why?

Because they checked almost every box.

• They were aligned with the dominant bull market theme: AI.

• They were sitting inside a hot industry group.

• They were among the strongest stocks in that group.

• They had explosive earnings growth, big sales growth, strong margins, high return on equity, and elite relative strength.

That is not complicated. That is exactly what the legendary growth stock traders have been teaching for decades.

Look for the strongest stocks, in the strongest groups, supported by the strongest fundamentals, during a confirmed bull market.

Were there other high-flying names?

Of course.

But many of them did not have all the ingredients these names had.

The only major O’Neil-style box these stocks have not consistently checked is the three-year annual EPS growth requirement of 25% or greater each year.

But outside of that, they had almost everything you want to see in a potential market leader.

And today, finding these names is easier than ever.

“Nothing to Buy?” MU Was Hiding in Plain Sight

I keep hearing the same thing since the follow-through day on April 8th and the move back above the 50-day and 200-day moving averages:

“There’s nothing to buy. Everything is extended.”

I don’t think that’s true.

The issue usually isn’t that there are no stocks setting up. The issue is that most traders are not prepared before the setups happen.

If you had a proper watchlist built, many of the names breaking out right now have been showing leadership for a long time. Yes, some moved before the market gave us confirmation to start getting involved again. That happens. But some broke out after.

MU is a great example.

Micron had a beautiful cup-with-handle setup and broke out on April 22nd, roughly 10 to 11 days after the market gave us the signal to start getting back involved.

And this wasn’t some random laggard.

MU had strong relative strength, a hot industry group, big earnings growth, strong sales growth, powerful forward estimates, and a chart that was setting up.

This is exactly why I built the Relative Strength Stock Screener.

The goal is simple: narrow your watchlist down to the strongest leadership names before the move happens, so you don’t miss these types of setups.

Also, try using the MTS Score.

That is our proprietary leadership rating that looks at relative strength, earnings, sales, pre-tax margins, ROE, industry group relative strength, and proximity to 52-week highs.

It is designed to help you quickly separate true leadership from average names.

There have been plenty of stocks.

You just need to know where to look.

Why MU Keeps Showing Up

There is a reason I keep bringing up Micron in the Substack chat.

Look at what is happening under the surface.

Earnings and sales are not only strong, they are improving quarter after quarter. That is the key.

Now combine that with:

• A leading industry group, one of the strongest in the market

• Return on equity around 22%

• Expanding margins above 40%

• Relative Strength Rating of 99

• Increasing institutional ownership quarter over quarter

The stock continues to find support at the 50-day and 10-week moving averages and pushes higher.

This is what a true leader looks like.

Why I Mentioned AAOI Before Earnings

Someone asked why I mentioned AAOI in early February with earnings coming up.

First, the stock checked several boxes I look for.

It was in a HOT group (telecom) showing strong relative strength across multiple timeframes. I had already seen success with LITE and CIEN, which are in the same space. It reminded me of past industry runs like the computer data storage group when SNDK, MU, WDC, and STX all moved together.

AAOI also had:

• Strong earnings and sales acceleration

• Rising forward estimates

• Accelerating fund ownership

• Tight price action on the right side of the chart

• Trading near new 52 week highs

Since that mention the stock has moved about 150%, but the trade management is the important part.

I normally do NOT buy a stock a few days before earnings. There is too much risk and no time to build a cushion.

I follow the advice from Paul Tudor Jones:

“Never trade in situations where you don’t have control. For example, I don’t risk significant amounts of money in front of key reports, since that is gambling, not trading.”

In this case there were about three weeks before the report, which gave the trade time to work.

From the original buy, the stock moved roughly 30% before earnings.

At that point the plan becomes simple:

• Trim a large portion before the report

• Lock in gains and reduce risk

• Hold a smaller position into earnings

Even great stocks can drop 15–20% overnight on earnings.

By trimming beforehand, the position already has a profit cushion, so the remaining shares carry much less risk.

This is something I learned studying the playbooks of William O’Neil, Mark Minervini, and David Ryan.

The goal isn’t predicting earnings.

The goal is managing risk while letting strong stocks work in your favor.