Saturday, November 16, 2013

Who are the New Leaders? - 11/16/13



The last three Sector Trends blog posts have examined the changing performance of high relative strength stocks and concluded, that especially since the October 5 blog post (the last before the government shut down histrionics), stock market leadership had changed, or rotated, to new names. Last week's blog noted  the market looked "prepared to move forward with a new group of leaders".

But left unanswered was the question "who are the new leaders?" This week's post will attempt to answer that question by examining current stock leadership, and categorizing it as follows:

- Potential New Leaders
- Consistent Leaders
- Rising Leaders
- Falling Leaders
- Former Leaders

The blog's author follows the "CANSLIM"  investing method William O'Neil described in his book "How to Make Money in Stocks" . As described in this book  the "L" in the acronym CANSLIM stands for Leader or Laggard - Which is your Stock? In the book  O'Neil advocates limiting purchases to stocks with RS (Relative Strength) ratings of 80 or higher, and explains that  "the really big moneymakers have RS ratings of 90 or higher just before they break out of their first or second base structure".

O'Neil's definition of a "leader" goes far beyond its RS rank, so for the purpose of this analysis we will analyze a subset of stocks that we will call "potential leaders". These are stocks with RS > 80, price > $20, and average daily volume > 500K. This definition will usually produce a list of ~ 300 names. The price and volume cutoffs help provide a reasonable measure of liquidity so they could also be considered "potential liquid leaders". These stocks were part of the initial data screen but were not included in any of the tables due to a lack of historical data: BITA, GOGO, JKS, LDOS, LIN, MOLXA, NOAH, OCIP, STSA, VJET, VOYA, WUBA.

For this analysis the blog examines not only current behavior, but how the stocks RS rating has performed in monthly increments over the past 5 months. The data for most of these screens was pulled mid week.

Potential New Leaders: To determine who these new leaders were the blog ran the screen described in the paragraph above, exempting industry groups containing ETFs and other groups containing investment funds. It returned 292 stocks.

The blog examined RS ratings for these 292 stocks on June 15, July 14, August 18, September 14, October 5, and November 12. For a stock to be considered a potential "new leader" if its current RS rating must be 80+, but with a RS rating < 80 for each of the June, July and August time periods. This resulted in the 72 stocks (~ 25% of the total) seen in the table below.

The table is sorted by RS high-to-low as of November 12. RS ratings 90-99 are highlighted dark green, 80-89 light green, < 50 red.

The data has not been scrubbed, for example Mako Surgical, Viropharma and Mens Wearhouse appear on the list due to buyout offers; and DSW's loss % is inaccurate due to its recent 2 for 1 stock split.

Symbol
Name
Gain% since 10/5
RS 11/12
RS  10/5
RS   9/14
RS 8/18
RS 7/14
RS 6/15
Ind Group RS
A/D Rating
MAKO
Mako Surgical Corp
1.2%
98
98
77
60
34
13
A
A-
VPHM
Viropharma Inc
21.3%
96
92
93
72
72
60
A+
B
AKRX
Akorn Inc
4.2%
92
92
88
76
34
31
A+
A-
LPI
Laredo Petroleum
-7.0%
92
94
88
79
41
38
A+
D
UTHR
United Therapeutics
9.0%
92
89
85
75
76
76
A+
A
SPR
Spirit Aerosystems
21.5%
92
72
76
78
59
52
A
B+
XEC
Cimarex Energy Co
-0.2%
91
93
87
77
63
70
A+
D-
FIVE
Five Below Inc
9.5%
91
85
82
54
72
50
C+
B+
MCK
Mckesson Corp
19.7%
91
80
79
75
70
72
A+
A-
BBG
Barrett Bill Corp
10.0%
91
76
61
49
41
62
A+
B+
RESI
Altisource Residential
14.7%
91
85
61
47
23
17
E
B
SM
S M Energy Co
8.1%
90
88
84
78
65
72
A+
A-
TRN
Trinity Industries Inc
18.6%
90
78
75
64
57
62
B-
B+
NAV
Navistar Intl Corp
4.2%
89
91
84
72
53
52
C
B-
LVS
Las Vegas Sands Corp
6.8%
88
85
80
70
63
76
A-
C+
GNTX
Gentex Corp
12.5%
88
80
76
58
78
73
B-
B
LVLT
Level 3 Com
6.3%
88
82
74
47
36
31
C-
B+
MW
Mens Wearhouse
35.5%
88
30
33
75
77
69
B-
B
X
United States Steel
25.7%
88
56
33
23
18
10
A
A-
MOLX
Molex Inc
0.1%
87
86
88
49
55
57
A-
C
HAL
Halliburton Company
11.0%
87
80
81
76
78
76
B+
B+
CRM
Salesforce.com Inc
7.3%
87
84
79
49
49
20
A+
B-
CAH
Cardinal Health Inc
17.0%
87
77
75
70
67
62
A+
A-
CLR
Continental Res Inc
0.0%
87
87
75
70
72
50
A+
D+
WLL
Whiting Petroleum
0.1%
87
86
59
54
43
41
A+
B-
UA
Under Armour Inc
-1.3%
86
90
90
78
65
66
B-
C
SGY
Stone Energy Corp
-5.2%
86
92
86
79
55
31
A+
D-
MA
Mastercard Inc Cl A
9.6%
86
79
84
77
73
77
A
B-
ULTA
Ulta Salon
4.5%
86
82
84
54
53
62
B
B-
NKE
Nike Inc Cl B
6.6%
86
81
80
69
72
79
B+
A
FLS
Flowserve Corp
13.7%
86
74
74
64
70
75
A
B
MHFI
Mcgraw Hill Financial
7.8%
86
77
71
76
59
66
A-
B+
GPN
Global Payments Inc
8.0%
86
78
50
49
45
55
A
B+
KORS
Michael Kors
7.6%
85
86
86
78
79
77
B-
B+
VOD
Vodafone Group
3.4%
85
82
79
60
49
50
B+
A-
CTSH
Cognizant Tech
8.0%
85
75
68
49
38
13
A+
B+
PMTC
PTC Inc
10.9%
85
75
68
76
74
43
C
B+
AMZN
Amazon.com Inc
9.6%
85
72
64
64
74
60
A
B+
FDX
Fedex Corp
17.3%
85
75
59
64
49
43
B+
A-
BCR
Bard C R Inc
18.9%
84
58
66
58
47
60
A-
A
XYL
Xylem Inc
20.4%
84
43
35
20
55
36
C+
B
APOL
Apollo Group Inc
23.9%
84
43
30
17
12
29
A
C+
ECL
Ecolab Inc
7.1%
83
81
82
75
76
73
C-
B-
DLTR
Dollar Tree Inc
0.1%
83
78
76
62
72
55
C+
B
FRX
Forest Labs Inc
13.9%
83
56
69
74
68
69
A+
A+
LM
Legg Mason Inc
15.8%
83
74
68
62
65
73
C-
B-
BRY
Berry Petroleum
14.5%
83
58
57
47
32
50
A+
B
ARW
Arrow Electronics
9.3%
82
79
78
76
65
45
A-
B+
SHLD
Sears Holdings
-3.7%
82
89
78
5
13
17
C-
B+
DSW
D S W Inc
-46.6%
82
74
75
75
76
70
B-
C
SN
Sanchez Energy
-9.4%
82
87
75
68
72
75
A+
C-
AWAY
Homeaway Inc
14.1%
82
49
74
66
70
79
B+
B-
HP
Helmerich & Payne
4.1%
82
80
74
60
74
60
C+
B+
DV
Devry Education
16.0%
82
54
71
54
72
57
A
B
TJX
T J X Cos Inc
9.4%
82
71
69
54
63
69
B-
B
AON
Aon Plc
10.6%
82
75
68
68
70
75
C+
A+
AVGO
Avago Technologies
3.7%
82
76
57
47
61
57
B+
B
HUN
Huntsman Corp
4.2%
82
82
57
45
59
62
B-
B+
PRGO
Perrigo Co
16.3%
82
54
55
51
57
50
A-
B
FRC
First Republic Bank
5.9%
81
82
81
76
55
62
B+
A-
FLR
Fluor Corp
7.8%
81
75
59
60
49
48
C
B
SBAC
S B A Communications
17.1%
81
54
55
41
65
76
A
B+
BHI
Baker Hughes Inc
15.5%
81
54
53
43
59
41
A-
A-
YOKU
Youku Tudou
-14.2%
80
94
90
62
32
55
A+
B-
HAIN
Hain Celestial Group
6.7%
80
79
81
72
73
70
D
B+
MSCI
M S C I Inc
4.1%
80
81
72
69
53
43
B
D+
CAKE
Cheesecake Factory
10.5%
80
64
71
75
78
79
A
B
CERN
Cerner Corp
3.2%
80
77
66
60
68
76
A
B-
LINTA
Liberty Interactive
13.0%
80
66
64
49
78
76
C+
B-
LO
Lorillard Inc
15.3%
80
51
53
37
57
60
D-
A+
FWLT
Foster Wheeler
11.9%
80
71
44
58
43
62
A
B-
CLGX
Corelogic Inc
23.2%
80
49
40
47
47
33
A
B-

Looking at industry group composition the Oil&Gas-U S Expl&Prod group has 9 representatives, the Retail-Apparel/Shoes/Acc group has three, no other group has more than two.

Consistent Leaders: This group of 33 stocks has maintained an RS rating of 95+ for each of the monthly periods since June 15th and, at least by this measure, are the most consistently high RS stocks of the past 5 months. The list is sorted high-to-low by gain% since October 5.

Symbol
Name
Gain% Since Oct. 5
RS 11/12
RS  10/5
RS   9/14
RS 8/18
RS 7/14
RS 6/15
Ind Group RS
A/D 11/12
CSIQ
Canadian Solar Inc
44.1%
99
99
99
99
99
99
A+
A
SNTS
Santarus Inc
42.5%
97
93
95
99
99
98
A+
B+
SCTY
SolarCity Corp
39.6%
99
97
98
98
99
99
A+
B
SAVE
Spirit Airlines Inc
26.5%
97
92
92
92
94
96
B-
B+
VIPS
Vipshop Holdings
24.4%
99
99
99
99
99
99
A
B+
ABFS
Arkansas Best
20.0%
99
98
98
98
99
98
B-
A
DXCM
Dexcom Inc
19.4%
96
94
95
96
95
95
A
B-
WBMD
Webmd Health Corp
16.4%
95
94
92
96
97
95
A+
B-
BBY
Best Buy Co Inc
14.7%
98
97
98
94
94
94
A+
A-
FANG
Diamondback Energy
14.1%
98
97
98
97
96
97
A+
B
GME
Gamestop Corp Cl A
12.3%
95
95
97
97
97
96
A+
A-
DAL
Delta Air Lines Inc
11.6%
96
96
95
94
93
95
B-
A-
KKD
Krispy Kreme
11.2%
97
96
95
99
98
98
A
B+
NUS
Nu Skin
10.7%
97
97
97
97
96
92
B+
B-
SPWR
Sunpower Corp
9.0%
99
99
99
99
99
99
A+
C
AMBA
Ambarella Inc
7.7%
96
96
95
96
98
98
B+
C+
MPEL
Melco Crown
6.2%
95
96
95
94
90
95
A-
C-
NXST
Nexstar Broadcast
5.0%
99
99
98
98
99
99
A+
B-
P
Pandora Media Inc
2.7%
98
97
98
97
95
90
C-
B+
NFLX
Netflix Inc
2.0%
98
99
99
98
99
99
A-
B-
YY
YY Inc Ads
-0.9%
99
99
99
99
99
99
A+
C
SBGI
Sinclair Broadcast
-3.4%
97
97
97
96
99
99
A+
B
QIHU
Qihoo 360
-5.5%
98
99
99
99
98
97
A+
C-
Z
Zillow Inc Cl A
-6.3%
95
97
98
99
93
90
A+
D-
ISIS
Isis Pharmaceuticals
-9.7%
98
98
98
97
99
97
A+
C+
CLVS
Clovis Oncology Inc
-10.2%
97
97
99
99
99
99
A+
E
CTRP
Ctrip.com Intl Ltd Adr
-14.1%
96
98
98
99
96
97
B+
D-
ALNY
Alnylam Pharma
-16.2%
97
99
99
99
99
96
A+
E
AEGR
Aegerion Pharma
-16.8%
98
99
99
99
99
99
A+
C-
CLDX
Celldex Therapeutics
-20.7%
99
99
99
99
99
99
A+
C+
ACAD
Acadia Pharma
-21.5%
99
99
99
99
99
99
A+
B+
TSLA
Tesla Motors Inc
-23.9%
98
99
99
99
99
99
B
D
NPSP
N P S Pharma
-26.0%
97
99
99
99
96
97
A+
D


Rising Leaders: This subset of stocks is showing the greatest positive change in RS rank since October 5, and is sorted high-to-low by RS delta. As above, the data is unscrubbed.

Symbol
Name
Gain% since 10/5
Delta
RS 11/12
RS  10/5
RS   9/14
RS 8/18
RS 7/14
RS 6/15
MW
Mens Wearhouse Inc
35.5%
58
88
30
33
75
77
69
XYL
Xylem Inc
20.4%
41
84
43
35
20
55
36
APOL
Apollo Group Inc Cl A
23.9%
41
84
43
30
17
12
29
AWAY
Homeaway Inc
14.1%
33
82
49
74
66
70
79
X
United States Steel
25.7%
32
88
56
33
23
18
10
CLGX
Corelogic Inc
23.2%
31
80
49
40
47
47
33
HPQ
Hewlett-Packard Co
23.3%
30
86
56
57
93
92
85
GOOG
Google Inc
16.0%
29
80
51
64
60
81
82
LO
Lorillard Inc
15.3%
29
80
51
53
37
57
60
DV
Devry Education
16.0%
28
82
54
71
54
72
57
PRGO
Perrigo Co
16.3%
28
82
54
55
51
57
50
FRX
Forest Labs Inc
13.9%
27
83
56
69
74
68
69
SBAC
S B A Comm
17.1%
27
81
54
55
41
65
76
BHI
Baker Hughes Inc
15.5%
27
81
54
53
43
59
41
BCR
Bard C R Inc
18.9%
26
84
58
66
58
47
60
BRY
Berry Petroleum
14.5%
25
83
58
57
47
32
50
PVTB
Privatebancorp Inc
20.5%
24
86
62
77
86
85
72
MDCO
Medicines Company
10.5%
20
82
62
78
51
57
84
SPR
Spirit Aerosystems
21.5%
20
92
72
76
78
59
52
UAL
United Continental
15.9%
19
87
68
75
79
76
88
EXH
Exterran Holdings
14.8%
19
81
62
68
74
93
94
CP
Canadian Pacific Rail
17.0%
17
81
64
64
60
79
84
XONE
ExOne Company
39.5%
16
92
76
95
98
99
97
CAKE
Cheesecake Factory
10.5%
16
80
64
71
75
78
79
BLMN
Bloomin' Brands Inc
13.5%
15
81
66
83
88
94
95
BBG
Barrett Bill Corp
10.0%
15
91
76
61
49
41
62
SNDK
Sandisk Corp
10.2%
14
86
72
74
64
86
85
LINTA
Liberty Interactive
13.0%
14
80
66
64
49
78
76

Falling Leaders: This subset of stocks still has RS > 80 but is showing the largest decline in RS since October 5. Unscrubbed data.

Symbol
Name
Gain% since 10/5
Delta
RS 11/12
RS  10/5
RS   9/14
RS 8/18
RS 7/14
RS 6/15
YOKU
Youku Tudou
-14.2%
-14
80
94
90
62
32
55
LNKD
Linkedin Corp
-14.6%
-13
81
94
96
96
93
90
TRLA
Trulia Inc
-24.0%
-11
86
97
98
97
87
80
WWWW
Web.com Group Inc
-20.5%
-11
84
95
96
96
94
88
HLF
Herbalife Ltd
-9.3%
-10
83
93
93
92
65
64
GDP
Goodrich Petroleum
-27.2%
-8
90
98
99
98
55
22
GDOT
Green Dot Corp Cl A
-8.2%
-8
87
95
95
97
87
83
GPOR
Gulfport Energy Corp
-14.8%
-8
86
94
93
92
93
96
PXD
Pioneer Natural Res
-9.2%
-8
86
94
92
90
91
88
CIEN
Ciena Corporation
-14.2%
-8
87
95
92
86
91
84
LGF
Lions Gate
-11.0%
-7
88
95
97
96
97
95
BIDU
Baidu Inc Ads
-5.4%
-7
88
95
92
88
25
36
DLPH
Delphi Automotive
-4.9%
-7
80
87
89
91
93
93
SHLD
Sears Holdings Corp
-3.7%
-7
82
89
78
5
13
17
HCA
H C A Holdings Inc
-1.4%
-7
80
87
68
66
65
85
PDCE
P D C Energy Inc
-12.6%
-6
87
93
90
93
95
93
YNDX
Yandex N V Class A
-5.3%
-6
87
93
90
87
89
80
OSK
Oshkosh Corp
-0.3%
-6
84
90
88
90
84
83
SGY
Stone Energy Corp
-5.2%
-6
86
92
86
79
55
31
PNK
Pinnacle Ent
-7.4%
-5
89
94
96
92
93
94
CELG
Celgene Corp
-5.0%
-5
88
93
94
91
92
91
FTK
Flotek Industries Inc
-12.5%
-5
88
93
92
88
94
91
OCR
Omnicare Inc
2.2%
-5
82
87
89
90
85
88
HLS
Healthsouth
-1.8%
-5
82
87
85
84
81
86
BX
Blackstone Group Lp
-2.1%
-5
86
91
82
78
84
86
SN
Sanchez Energy Corp
-9.4%
-5
82
87
75
68
72
75

Former Leaders: This group of stocks had an RS rating > 85 as of September 14 but has since fallen < 80. The group is sorted high-to-low by RS delta.

Symbol
Name
RS       Delta
RS Rating 11/14
RS Rating 9/14
SRPT
Sarepta Therapeutics Inc
-90
1
91
NSM
Nationstar Mtg Hldgs Inc
-60
34
94
TNGO
Tangoe Inc
-53
42
95
AVG
A V G Technologies N.V.
-49
46
95
VRTX
Vertex Pharmaceuticals
-48
38
86
QLIK
Qlik Technologies Inc
-47
40
87
RKT
Rock Tenn Co Cl A
-44
46
90
BMRN
Biomarin Pharmaceutical
-38
50
88
SODA
Sodastream Intl Ltd
-38
48
86
DAN
Dana Holding Corp
-36
50
86
BRKR
Bruker Corp
-31
55
86
FLIR
Flir Systems Inc
-29
59
88
MELI
Mercadolibre Inc
-29
57
86
HTZ
Hertz Global Holdings
-27
62
89
SNE
Sony Corp American Shrs
-24
64
88
ASML
A S M L Holding N.V. NY
-24
62
86
REXX
Rex Energy Corp
-23
66
89
TSN
Tyson Foods Inc Cl A
-22
67
89
OCN
Ocwen Financial Corp
-21
72
93
SFLY
Shutterfly Inc
-20
72
92
GMCR
Green Mtn Coffee Roastrs
-18
78
96
SGEN
Seattle Genetics Inc
-17
78
95
THRX
Theravance Inc
-17
75
92
AET
Aetna Inc
-16
71
87
EQT
E Q T Corp
-16
70
86
HUM
Humana Inc
-15
72
87
NTES
Netease Inc Adr
-14
76
90
CREE
Cree Inc
-13
75
88
NCR
N C R Corp
-13
75
88
WDAY
Workday Inc Cl A
-13
75
88
OII
Oceaneering Intl Inc
-12
74
86
CI
Cigna Corp
-11
79
90
CHK
Chesapeake Energy
-11
76
87
TEL
Te Connectivity Ltd
-11
74
85
WLP
Wellpoint Inc
-10
77
87
KAR
Kar Auction Svcs Inc
-9
79
88
EOG
E O G Resources Inc
-9
77
86
FOXA
Twenty-First Cen Fx Cl A
-9
77
86

Industry group representation was lead by the Medical-Biomed/Biotech group with 5 stocks, followed by the Medical-Managed Care group with 4, Oil&Gas-U S Expl&Prod with 3, and Retail-Internet and Finance-Mrtg&Rel Svc with 2 each. No other group had more than one.



Performance: The table below shows the price performance for these groups for Friday, the week, and the trailing month:


Price Performance

Friday 11/15
Week Ending 11/15
Month Ending 11/15
Potential New Leaders
0.81
3.08
11.82
Consistent Leaders
0.52
5.12
9.38
Rising Leaders
0.43
2.38
17.24
Falling Leaders
0.97
3.99
-1.74
Former Leaders
0.93
1.44
-7.47
  

                                            **********************



Market Overview: The market had a solid week as the DJIA, S&P 500, and Nasdaq all closed at new highs. The Russell 2000 bounced in lower volume towards its October 29 high.

For several weeks now the Sector Trends blog has pointed out the apparent shift by investors into larger cap names, and the impact of this can be seen in the table below. The table shows price performance for the four major indices over the trailing 26 weeks, and is sorted high to low by 26 week performance. Green shading indicates the index finished in the top half for the time period in question, while red shading indicates it finished in the bottom half.  

Note how the Nasdaq and Russell 2000 lead over the 13 and 26 week time periods, but are beginning to lag over 1-5 week time periods while the S&P 500 and DJIA begin to outperform.

Index
1    Week Gain
2    Week Gain
3    Week Gain
5    Week Gain
13   Week Gain
26   Week Gain
Nasdaq Composite
1.7%
1.6%
1.1%
5.1%
10.6%
13.9%
Russell 2000
1.5%
1.9%
-0.2%
2.9%
9.0%
12.0%
S&P 500
1.6%
2.1%
2.2%
5.6%
8.6%
7.8%
DJIA
1.3%
2.2%
2.5%
4.8%
5.8%
4.0%

Summary: The market appears healthy, but the low volume bounce and lagging performance of the Russell 2000 suggests a shift to more stable names.

                                            **********************

Industry Group Performance:

Retail: Retail related industry groups have been mostly weak with only 4 of 20 groups ranked in the top 50 of MarketSmith's industry group ranks. That's beginning to change. Last week these groups had a strong week led by the Retail-Department Stores group which finished the week with a 5% gain, coming in at #6 on the trailing 1 week price performance list.

55% of the retail groups (11 of 20) finished the week in the top 50; and 60% of the groups (12 of 20) now rank in the top 50 of the trailing 5 week price performance list.

There appears to be a rotation into retail underway.

Apparel: Both the Apparel-Shoes & Rel Mfg and Apparel-Clothing Mfg  groups rank in the top 25 of the trailing 5 week price performance lists with 9.0% and 9.3% gains respectively. Over the same 5 week period the Apparel-Shoes & Rel Mfg group has jumped +43 in MarketSmith's industry group ranks to #42 overall, and the  Apparel-Clothing Mfg  group has jumped +24 to #81 overall.

These groups appear to be benefitting from the move in retail mentioned above. The Retail-Apparel/Shoes/Acc group ranks #40 on the trailing 5 week price performance list with a 7.4% gain, and the group jumped +25 in MarketSmith's indutry group rankings last week to #82 overall.

Media: 4 of 5 Media related groups rank in the top 50 of MarketSmith's industry group rankings while at the same time 4 of 5 rank in the bottom 50 of the trailing 3 week price performance list, and all 5 rank in the bottom half of the trailing 5 week list. These groups are starting to look tired.

Energy: A mediocre week for the Oil&Gas-U S Expl&Prod group; it's still ranked #5 in MarketSmith's industry group rankings but finished the week with a 0.5% gain (#152), and ranks #157 on the trailing 5 week list with a 1.1% gain.

The Oil&Gas-Refining/Mktg group is ranked #180 in MarketSmith's industry group ranks but appears to have turned the corner. The group finished the week ranked #13 on the trailing 1 week price performance list with a 4.3% gain, and ranks #42 on the 5 week list with a 7.4% gain.

                                            **********************

All data and charts displayed here are the property of MarketSmith, and are published here with their permission. 

The Sector Trends blog does not make forecasts and does not cheerlead with its commentary. The perspective offered is on current trends in the market, which sectors and groups are rotating, and which stocks from these groups are likely to perform best in a neutral/positive environment. Readers need to provide their own assessment of market health, employ their own risk management strategies, and trade accordingly. In a declining market nearly all equities will suffer, including those found listed here. 

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