Mutiple Stocks (Industry) Analysis

Both Charles Dow and Jesse Livermore observed herd behavior in markets.  On the charts, this can be seen  the broad market pulling individual stocks in the same direction.  A large portion of an individual stock's direction is attributed to the market's action, and only lesser fraction is attributed to the stock itself.
For the past year, I have been timing my trades based on a larger group of stocks.  The advantage of timing my trades in such a way has the following advantages:

1. A chart of a group of stocks is often less choppy.  Basing my actions on a less choppy chart reduces the whipsaws that I that may encounter had I chosen to trade based on a single stock chart.
2. Timing my trades based on a group often result in the trade responding rapidly to the changing market conditions.  This is because a group of stocks is basically, an asset class, a sector, an industry, or even a country.
3. Basing my trades based on an external, broader, market gives me a stronger mental justification for holding a position.  My belief in the stock is complemented by other stocks moving in the same direction.  That means that multiple stocks in the same industry is being bought, thereby increasing the momentum of the move.

Lets take a look at 2 examples.
I have a created a chart based on the arithmetic average of DBS, OCBC, and UOB.

The banking stocks have broken out and are making new highs.  I am happy to hold my positions, and will not be taking any profits yet.  As a trend follower, I must not put a cap on how high it can go.

Now, let look at a chart of 6 stocks: Golden Agri, Olam, Noble, First Res, Wilma, Indofood.

As a trend follower, I will stay away from buy any of these stocks until it break out of its trading range.