There is no such thing as a typical bull market. Each has a unique character, so it is hard to make generalisations. But there is one interesting exception. Sectors that were beaten down most severely in a previous downturn often rebound most vigorously at the start of a new bull run. These bounce-back rallies often run out of steam after a few weeks, or months. But even so, the ride can be quite exciting for investors holding the right shares.

This year is following the norm. Shares in the FTSE Fledgling index were beaten down by more than their bigger cousins in the FTSE 100 during the recent bear market. They bounced back vigorously from mid-March to mid-June, rising three times as much as the FTSE 100.

This super-charged rally now appears to have run its course. Both indices gained by a similar amount from mid-June to the present. In my view, the easy money has now been made on small company shares. Some small companies will perform well in the months ahead, but selectivity will be the key to capturing gains.

Banks were another severely beaten-down sector. True to form, they have barrelled ahead in recent months, gaining almost five times as much as the Footsie. If the past repeats itself, the banking rally will end soon – assuming it has not already done so. Some bank shares will continue to deliver healthy gains, but again, selectivity will be the key.

I suspect that the current bull market is now entering a more rational phase. Unfortunately, it is not easy to forecast likely winners. History shows that leadership in one bull market provides no clues about the future. Recall the outlandish tech share gains in the 1990s bubble versus their weak performance in the bull market of 2003-07.

The reason is that every rally is triggered by different economic and psychological variables. The level of importance investors assign to each variable, as well as its actual behaviour, constantly changes.

In order to predict which sector or share will do well in the next few months, a good starting point is to understand how the approaching economic recovery will unfold. A strong recovery might favour beaten down shares in distressed companies that are hanging on by a fingernail. A slow, stuttering recovery, with unfavourable bank lending prospects, is my own view of the future. In such an environment, well-financed companies that do not need a friendly banker to grow will probably be better investments.

One sector that fits the bill is the tech sector. Recall that these companies were woefully under-financed during the early part of this decade. Many have learned their lessons and have repaired their balance sheets.

There is a second important point about tech shares. Business customers have reduced spending because of poor economic conditions. But technology is a key driver of the modern economy. So, I suspect that many recent cuts were temporary postponements, not permanently lost sales.

Add the two themes together – the role of technology in modern life and strong balance sheets – and tech shares stand out in terms of potential.

A company that catches my eye on both dimensions is Anite, a software company with a strong balance sheet. Anite has three main operations. In the telecom sector, it tests handsets and broadband networks. Its third business is travel reservation systems. The share price has been affected by problems in all three areas.

Travel suffers from recession as well as industry consolidation which eliminated several key customers. News of these problems has been in the market for more than a year and I suspect that the bad news is in the price.

Both telecom divisions were hit by a significant slowdown in spending as the industry awaits the arrival of 4G – the next wave in the evolution of mobile communications. Independent experts forecast that mobile data traffic will increase 100-fold in the next five years. Major telecom networks have no choice but to upgrade to 4G or their existing networks will be paralysed.

Anite already announced that the current year is a tough one but forecasts that profits will improve in its next fiscal year.

Investors appear to be downplaying short-term earnings problems if they see growth potential. If I am right, Anite is a good candidate for a solid re-rating as 4G spending begins in earnest.

The next interim management statement is not due for several weeks. Shares are likely to rally if management is optimistic about the year ahead. Fingers crossed.

Stock market historian David Schwartz is an active short-term trader, writing about his own trades and strategies. Send any comments or suggestions to tradersdiary@ft.com