2010 Winners with Insight into 2011

By Quint Tatro

With the averages off to a boisterous start, traders and investors alike are at their turrets trying to find the next big thing. Will 2011 be the year that natural gas finally turns the corner? Will retail continue the torrid pace it set in 2010? Will the recent leadership in the financial sector have any staying power? Perhaps the most difficult job of any trader is finding a new trending stock or theme and actually having the fortitude to stay with it for the duration.

I know I'm guilty of getting in at the right time, but selling too soon and leaving massive gains on the table. The age-old mantra to “cut your losers and let your winners ride” is perfect theory but difficult in execution. Let's take a look back at some winners of 2010, and see if we can glean any insight to help our trading in the year ahead.

(To read Lloyd Khaner's article on multiple concerns facing investors this week, click here.)

(To view Brett Chase's piece on stock catalysts for biotech and drug companies, click here.)

PowerShares Exchange-Traded Fund (QQQQ) is currently attacking the November 2007 high. While still 50% off of the 2000 highs, QQQQ nonetheless has been a leader off of the March 2009 lows, and should be watched as a market barometer going forward. Granted, iShares Russell 2000 Index (IWM) has staged a bigger runoff of those same March 2009 lows but is not within spitting distance of its 2007 highs. So if merely buying and holding an ETF would have gotten your account back at all-time highs with very little expense or consternation, the goal of a trader has to be a bit bigger. Let's take a look at some names that have surpassed their 2007-08 highs, and see what they may hold for 2011.

(To see Josh Lipton's discussion of the "small-cap surge", click here.)

To read the rest, head over to Minyanville.