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Thursday, July 11, 2019 9:11:13 AM
A Strong Rotation on RRG and a Break to New Highs Make For a Killer Combination
By: Julius de Kempenaer | July 11, 2019
The Technology sector is rotating through the weakening quadrant on the Relative Rotation Graph at the moment. After a strong move in the first months of this year relative strength for XLK started to level off and has been flat more or less since April.
We'll have to wait and see if the sector can pull off a rotation back to leading without hitting the left-side of the RRG canvas first.
The rotations for the individual stocks in the Technology sector are showing big differences. Varying from very strong, like MSI and SNPS, to very weak like NVDA and NTAP.
While I was browsing over the Relative Rotation Graph for the Technology universe I noticed an interesting rotation for INTU, Intuit Inc..
This stock entered the leading quadrant in the middle of 2017 when both RRG-Lines crossed above the 100-level. The JdK RS-Ratio line never crossed back until three weeks ago. The JdK RS-Momentum line dipped below 100 a few times, causing rotations through weakening and then back up into the leading quadrant again when RS-Momentum comes back above 100.
These are the characteristics of a strong relative trend where every rotation from weakening into leading marks the start of a new up-leg in that longer-term trend.
The rotation through lagging was very short lived and merely marked another pause/correction in the ongoing relative uptrend as the tail immediately started to rotate back into a strong RRG-Heading and come back into the weakening quadrant without hitting improving.
It only seems a matter of time before INTU enters the leading quadrant again.
The support for such a move comes from the price chart where INTU is breaking above its prior high which opens up the way for (much) more upside potential while the downside is protected by the old resistance level which has turned into support.
This killer-combination of a break to new highs on the price chart and a strong rotation, back, to the leading quadrant on the RRG makes INTU a stock well-worth watching in coming days/weeks.
Julius de Kempenaer
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By: Julius de Kempenaer | July 11, 2019
The Technology sector is rotating through the weakening quadrant on the Relative Rotation Graph at the moment. After a strong move in the first months of this year relative strength for XLK started to level off and has been flat more or less since April.
We'll have to wait and see if the sector can pull off a rotation back to leading without hitting the left-side of the RRG canvas first.
The rotations for the individual stocks in the Technology sector are showing big differences. Varying from very strong, like MSI and SNPS, to very weak like NVDA and NTAP.
While I was browsing over the Relative Rotation Graph for the Technology universe I noticed an interesting rotation for INTU, Intuit Inc..
This stock entered the leading quadrant in the middle of 2017 when both RRG-Lines crossed above the 100-level. The JdK RS-Ratio line never crossed back until three weeks ago. The JdK RS-Momentum line dipped below 100 a few times, causing rotations through weakening and then back up into the leading quadrant again when RS-Momentum comes back above 100.
These are the characteristics of a strong relative trend where every rotation from weakening into leading marks the start of a new up-leg in that longer-term trend.
The rotation through lagging was very short lived and merely marked another pause/correction in the ongoing relative uptrend as the tail immediately started to rotate back into a strong RRG-Heading and come back into the weakening quadrant without hitting improving.
It only seems a matter of time before INTU enters the leading quadrant again.
The support for such a move comes from the price chart where INTU is breaking above its prior high which opens up the way for (much) more upside potential while the downside is protected by the old resistance level which has turned into support.
This killer-combination of a break to new highs on the price chart and a strong rotation, back, to the leading quadrant on the RRG makes INTU a stock well-worth watching in coming days/weeks.
Julius de Kempenaer
Read Full Story »»»
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Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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