• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Breadth, What Breadth?
Stock

Breadth, What Breadth?

by February 11, 2023
by February 11, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Everybody is talking about breadth lately. And, indeed we see or have seen some improvement in New Highs / New Lows, A/D lines, New 52-Week Highs, etc.

As you may, or may not, know, I use Relative Rotation Graphs to visualize market breadth as well from time to time. There are two ways we can do that.

Plotting Percentage of Stocks Above 20-, 50-, & 200-EMA

The first way is to use the indexes that measure the percentage of stocks above a moving average. On StockCharts.com, we keep track of those numbers in a family of indices that start with !GT##XXX, where ## is the number of days of the Exponential Moving Average. This can be 20-, 50-, or 200-days. The XXX holds the symbol for the sector; see it as a measure of market breadth at sector level.

The RRG above shows this rotation for the EMA-20 indices, comparing it against the percentage of stocks above their 20-day EMA in the S&P 500. The recent strength is visible, with the majority of sectors on the right-hand side of the graph, while only the three defensive sectors are positioned inside the lagging quadrant.

But when we look a bit closer, we can see that only the three sectors inside the green oval, Materials, Technology, and Real-Estate, are still moving higher on the RS-Ratio scale, which means that they are strengthening against !GT20SPX. All sectors inside the yellow oval are losing strength, while the three defensive inside lagging have stopped going down.

The one thing that you’ve got to keep in mind using this setup is that the values for these indices are contained between 0-100. So, when one of these extremes is reached and the index remains level at that extreme, RS-Momentum will taper off by definition while RS-Ratio continues higher, but, eventually, RS-Ratio will also come down. As long as the trend for these numbers is still up, it will not go below 100.

The second chart shows the same image, but now uses the 50-day EMA percentages. As you can see, the universe is now a bit more spread out, with Materials at 93.10% while Staples has only 18.18% of stocks above its 50-day EMA. Only Materials and Energy have a positive RRG-Heading, and Technology and Real-Estate are still moving higher on the RS-Ratio scale. Inside the lagging quadrant, we now also find Industrials.

You Might Also Like
  • Is this a Dead-Cat Bounce or a Bounce with Legs?
  • MACD Reverse Divergence
  • Key Levels for the FAANG Stocks
  • Scanning for Strong Reversals via Bullish Engulfing Patterns
Share
0
FacebookTwitterPinterestWhatsapp

previous post
The Ultimate Relative Strength Chart Shows True Market Leaders
next post
Growing number of Catholics, Protestants support less strict abortion laws: poll

You may also like

GNG TV: Equity Markets Hanging on to “Go” Trend

May 26, 2023

Week Ahead: NIFTY Forms A Potential Top; Low VIX Continues...

September 23, 2023

How to Spot the Early Signs of a Reversal Using...

August 31, 2023

Equities Remain in Strong “Go” Trend, Powered by Financials

September 23, 2024

EQUITIES REMAIN IN “GO” TREND WITH SPARSE LEADERSHIP FROM TECH...

May 28, 2024

Can Small and Mid-Caps Save the Market?

July 23, 2024

Week Ahead: While Uptrend Stays Intact In Nifty, Stay Selective...

July 17, 2023

DP Trading Room: How To Time Your Trade Entries &...

November 28, 2023

USD strength Accelerates after completing bearish flag in EUR/USD

January 17, 2024

Tech Stocks Plunge: What This Means for Investors

November 16, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Bullish Reversals

    March 2, 2023

    AI Boom Meets Tariff Doom: How...

    December 20, 2024

    Broad-Based Rally Continues: Will It Soar...

    April 28, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here