hey how's it going traders thanks for checking out this video my name is travis from master to the
market and in this one we're going to talk about how to find stocks before they break out so if you
feel like a lot of times you buy stocks after they've already had their big move and you're
kind of chasing at that point setting yourself up for failure this is going to help you find these
stocks before they have those explosive runs to the upside so that you can get in on these players
early on and set yourself up to potentially make some really big returns on your investments
so without wasting any time the first way that you're going to potentially find these explosive
stocks before they explode is to look for what are known as sympathy plays now a sympathy play
is going to happen when a stock has a major run to the upside uh so whether that be an intraday run
of you know 100 200 300 percent or maybe it's one of those stocks that is kind of a multi-day runner
that's spiking up over the course of an entire week whatever it may be whenever there's a huge
move to the upside in the stock market that type of move is a lot of times going to cause
these sympathy plays which are just going to be stocks that are closely related to that leader
so what we can do is we can look for these similar stocks that are similar underlying companies
that also have similar market cap sizes to that leader stock and we can invest in them as sympathy
plays which many times end up having just as big of a run as that leader stock actually did okay so
a very common example of this is what we see a lot of times happen is some kind of biotech stock will
put out a press release talking about the drug or the treatment that they're currently working on
and if they had some kind of positive news for that drug or that treatment
of course their stock is going to positively react to that news and it's most likely going to have a
run to the upside and if that run is big enough to cause these sympathy plays what we see happen is a
lot of other similar biotech companies that are working on similar treatments and similar drugs
are also going to kind of start to pick up some momentum to the upside as well
so just to kind of give you a quick example of this we have the leader stock here mrin
now mrin was a big runner over the course of a little bit over a week's time frame
we saw it spike from under two dollars per share up to a high of 27.26 now a big run like that
of course is going to cause many sympathy plays and we actually did see many stocks
kind of exactly follow this run but the most notable of those with the most volume that
actually had the biggest run was the stock blin now blin was the sympathy play to the leader mrin
and just this sympathy play alone without even catching the leader and without even investing
in the leader you could have made a huge return by getting in this stock early on as a sympathy play
um and it ended up spiking from about two dollars fifty cents per share
up to a high of over 14 per share in under a week and if we take a look at some of the information
behind these companies and behind these stocks themselves first and foremost the
sector and kind of the industry of these stocks is both in the technology and software sector
and that's a very important thing when it comes to finding these sympathy plays first and foremost
they have to be in the same sector and they kind of have to be dealing with the same things
in order for them to be a potential sympathy play and in this case because they are both dealing
with technology and software that alone is going to make blin a very good candidate for a sympathy
play to the leader mrin another thing is that we want to see they have a similar market cap size
and we see that mri ends market cap is 93 million and blind's market cap is 49 million
now both of those are very very small market caps in the grand scheme of the stock market
and because of that they are similar enough for blind to be a potential sympathy play
and last but not least another thing that you want to look for is the number of shares outstanding
that this company has so the leader mrin in this case has about 10.3 million shares outstanding
and blin has about 6.4 million shares outstanding now because a lot of stocks actually have over
a billion shares outstanding these are both very small numbers and actually most of the
time when it comes to looking for these big spikes in the market the smaller the better
when it comes to the number of shares outstanding and that's because you can think of these shares
outstanding as the total amount of supply the stock has so when there's a large amount of
volume which kind of represents the demand and a small number of supply or shares outstanding
that's going to play a huge role in how these stocks trade and that's actually
going to give them the potential they have for a massive spike up like we saw both of them have
okay so to recap when there is a major run up in the market you can take a look at that leader
stock and you can kind of break it down and look for similar stocks within the same sector with
similar market cap sizes and also ideally with a similar number of shares outstanding to find these
potential sympathy plays and to start putting some money into them before they start to run up
and kind of follow that leading stock now another way to find these stocks and invest in them before
they explode is to look for hot sectors of the market at any given time there's really going
to be one sector of the market which is kind of outperforming the other sectors whether that be
technology whether that be biotech whether that be financial we even saw for a period of time that
there were stocks just dealing with electric vehicles that were really kind of popping off
whatever the sector may be you can look for undervalued stocks within that hot sector of
the market and you can invest in them before they also explode along with the rest of the sector
so if you've been trading for a little while at this point if you think back to kind of when cova
19 really started to take over and everything was kind of getting shut down and lockdowns all
around the world were taking place at that time it seemed like every single stock that was spiking up
was a stock dealing with a company that was kind of selling masks or looking for
a treatment for coven 19 even companies that were simply selling hand sanitizer
had stocks that were popping off at that time just because they were somewhat related to kova 19
and healthcare and that's a really good example for looking for these undervalued stocks in a hot
sector that again have potential to kind of catch up with the entire sector and have a big spike up
another example is if we take a look at the cannabis sector of the market early on during
2021 in the first quarter of the year there was a lot going on with cannabis sector of the market
we saw a lot of legalization worldwide dealing with cannabis and marijuana and because of that
there were tons of stocks within this cannabis sector of the market that had huge runs to the
upside because of it so for example one of the most notable was tlry we saw that tlry went from
about four dollars per share up to a high of per share within about this three-month time frame
we saw cgc go from a low of under 14 per share up to a high of over 56 dollars per share
we saw acb go from a low of under four dollars per share up to almost 19 per share and we saw
sndl go from under 14 cents per share up to a high of almost four dollars per share
now these are just a few examples but really the entire cannabis sector and just about every single
stock in the market that was dealing with cannabis at that time had some kind of spike to the upside
along with these four stocks so that just really goes to show how effective it can be to
you know kind of look for these undervalued stocks in a sector that is really hot at the time
and invest in them before they really start to explode to the upside another very popular
example is of course with the crypto sector of the market during late 2020 and early 2021 uh when
bitcoin and other cryptocurrencies really started to skyrocket and make new highs we saw that there
were a ton of different small cap stocks that also are dealing with bitcoin and different blockchains
that were really starting to spike up as well one of the most notable of those stocks was riot
uh which went from under three dollars per share up to a high of 79.50 we saw mara go from a low
of under two dollars per share up to 57.75 dpw went from under two dollars per share to 10.94
and last but not least we saw ncty go from about two dollars per share up to almost 90 per share
so some really really explosive gains with the stocks in this sector of the market again just
like the cannabis sector these are just a few of the examples but just about every stock dealing
with crypto or some kind of blockchain at the time was also running along with these four stocks
okay so what you can do is if you kind of know which sector is currently hot in the market
um you can use some kind of scanner or some kind of screener to look for different stocks in that
sector for example i'm here on finbiz.com and if you click on screener up in the top left
it's going to give you a completely free screener to look for these types of stocks
and let's just say that you know every single stock that's kind of running at this current time
is going to be in the healthcare sector of the market and kind of to break it down even further
you can look for that specific industry and let's just say that it's biotechnology
you can look for only biotech stocks and you can of course add in some more criteria
like the number of shares outstanding the market cap the price of the stock and so on and so forth
just to kind of narrow this list down even further but once you do this you're only going to find
stocks in that hot sector of the market which are all going to be potential investments that
have the potential to explode and kind of follow along with the momentum that the entire sector has
now another way that you can go about this is to kind of go up to the search bar and let's
just say that you were looking for a potential sympathy play for mrin we would search in mrin
and it's going to give you some information about the stock and about the company and instead of
screening for different sectors like we did just a moment ago you can see exactly which sector in
which industry this stock is uh so if there's a big runner currently happening and you want
to know which sector it's in to potentially look for other stocks within that sector
you can just search it here on finviz look at the sector and look at the industry and actually
if you click on the industry this is going to show us only stocks that are in the software
application industry of the market which is what the stock mrin is in and by doing this it's also
going to give you a list of potential sympathy plays that are also in a really well-performing
sector and industry of the market all right so those two things by looking for sympathy plays
and by looking for which sectors of the market are hot at the time are two really great ways to find
stocks and invest in them before they explode to the upside hopefully you enjoyed this video and
found some value within it if you did please make sure to give the video a like and subscribe to the
channel so you don't miss out on future videos and if you want to learn more about day trading swing
trading and even long-term investing as well as have access to our exclusive market resources in
our trading chat room with over a thousand active traders in it daily all of that can be found on my
website master the market which is going to be linked down below in the description but anyway
thank you again for watching i hope you enjoyed and until next video good luck with your trading
you