US Stocks Industry Groups Relative Strength Rankings
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US Industry Groups by Highest RS Score
Former leading group Coal ($DWCCOA) once again surged back up the RS rankings by 23 RS points, to finish in 2nd place overall. However, although the group chart has rebounded strongly off of its 200 day MA. It remains below the 50 day MA, and in late Stage 3. Which is known as Stage 3B in Stan Weinstein's Stage Analysis method. So it is vulnerable to a Stage 4 breakdown attempt, and is one of the few remaining groups to not have fallen into Stage 4 during the broad market Stage 4 decline that's made up the majority of 2022. There's no guarantee that it will, as Stage 4 doesn't have to follow Stage 3, as sometimes demand is strong enough for it to recover and make a Stage 2 continuation. But it is what happens the majority of the time.
Renewable Energy ($DWCREE) held onto the top spot once more, but there are less stocks in the group holding up i.e ENPH, FSLR etc, and so if they start to buckle. Then the group could see a deeper pullback in its early Stage 2 advance.
US Industry Groups by Weakest RS Score
At the weakest end of the RS rankings. Aluminium ($DJUSAL) held onto the bottom position for another week as it continues its Stage 4 decline to new lows.
Mortgage REITs ($DJUSMR) was the weeks biggest decliner, with a move of 2.83x its 52 week Average True Range (ATR), which was the biggest one week decline since the Covid crash in 2020, and more than double any other weekly candle since then.
104 Dow Jones Industry Groups sorted by Relative Strength
The purpose of the Relative Strength (RS) tables is to track the short, medium and long-term RS changes of the individual groups to find the new leadership earlier than the crowd.
RS Score of 100 is the strongest, and 0 is the weakest.
In the Stage Analysis method we are looking to focus on the strongest groups, as what is strong, tends to stay strong for a long time. But we also want to find the improving / up and coming groups that are starting to rise up strongly through the RS table from the lower zone, in order to find the future leading stocks before they break out from a Stage 1 base and move into a Stage 2 advancing phase.
Each week I go through the most interesting groups on the move in more detail during the Stage Analysis Members weekend video – as Industry Group analysis is a key part of Stan Weinstein's Stage Analysis method.
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Disclaimer: For educational purpose only. Not investment advice. Seek professional advice from a financial advisor before making any investing decisions.