• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock When You See Amazon Turning Around Beautiful Things Start To Happen
Stock

When You See Amazon Turning Around Beautiful Things Start To Happen

by March 31, 2023
by March 31, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

On the weekly RRG, the tail for XLY, Consumer Discretionary, is inside the improving quadrant and heading at an RRG-Heading of roughly 90 degrees. Not ideal; Somewhere between 0-90 is stronger as it indicates that the trend is still picking up speed, but not wrong either.

With only two sectors inside the leading quadrant, XLK and XLC, it makes sense to see if we can identify the next leading sector. Consumer Discretionary seems to be a good candidate.

Drilling into individual stocks

When we dive into the members of the Consumer Discretionary sector and use XLY as the benchmark, an interesting image shows up. Not one of these individual stocks is positioned inside the leading quadrant. This is because of the strong rotation of TSLA recently, which is pushing all other stocks in the opposite direction.

This distortion can be avoided by switching to RCD, the equal-weight sector ETF for the Discretionary sector.

On this RRG, you can see a much more evenly spread universe. I have zoomed in to visualize better the rotations which push TSLA off the grid, but we know where it is.

Looking at this image, quite rapidly, a few exciting tails can be identified. These are highlighted in the RRG below.

Inside LEADING: MGM, LEN, NVR, ULTA, TSCO

Inside IMPROVING: TSLA, AMZN, F, CMG, GM, HLT, MAR

Inside LAGGING: MCD, ORLY, DRI

Going over the charts of these companies, these three popped up as particularly interesting.

ULTA – ULTA BEauty Inc.

After breaking out of its range towards the end of 2022, ULTA started moving in a nice rising channel and this week managed to take out its previous high. This confirms the strength of the underlying trend, as it is visible in the series of higher highs and higher lows.

The recent break of resistance is a move into uncharted territory, opening up much more upside potential for ULTA. At the same time, the downside is well protected by the previous resistance level around 530 and the rising support line that marks the channel’s lower boundary slightly below that 530 area.

The RS line and the RRG-Lines in the chart above use RCD as the benchmark, just like on the RRG. The stable relative uptrend and the recent turn back up in both the JdK RS-Ratio and RS-Momentum lines suggest a new up-leg in this relative trend is underway.

AMZN – Amazon.com

THE biggest stock inside the Consumer Discretionary sector is Amazon at almost 25%. So it is safe to say that “When Amazon moves, the sector moves.”

Looking at the chart above, we can see how Amazon literally halved in price from 180 back in November 2021 to 80 at the end of 2022. The raw relative strength for AMZN against RCD has already started moving in a downtrend since the start of 2021.

This resulted in the RS-Ratio line remaining below 100 for over two years. The price decline seems to have halted after the low set in December, and improvements are starting to become visible from that trough.

A first higher low is now in place around 90, and the chart is now pushing for a break above double resistance offered by the horizontal level that lines up multiple highs and lows going back as far as 2018 and the falling resistance line that runs over the price peaks since late 2021.

A break above 103-105 will be a significant signal, confirming that the downtrend has ended and signaling the start of a new uptrend. It will undoubtedly help the raw RS-Line to turn around and get back into its, still, slightly falling channel and move to the upper boundary of that channel.

When Amazon turns around, that will very likely also be a driver for the further movement of the S&P 500.

MCD – McDonald’s Corp

The third chart is for MCD. Although the tail is still inside the lagging quadrant, it has made a nice turn back up and into an RRG-Heading between 0-90 degrees.

These rotations into a strong RRG-heading are always a sign of strength, regardless of which quadrant they occur. But what makes this one extra interesting is the break of price to new highs, new All-Time-Highs, into uncharted territory.

In October 2022, MCD pushed above horizontal resistance around 260, but shortly after that break started to move in a slightly down-sloping range while using 260, the former breakout level, as support.

These weeks’ jump above the upper boundary of that consolidation and above the previous highs at 278 is signaling a new phase in this uptrend. There is no overhead resistance anymore, and the downside is protected around the 270 area, where the former upper boundary of the trading range can now be expected to offer support.

Overall, it is interesting to see that the Consumer Discretionary sector is showing a mix of stocks that are either, very close to, breaking to new all-time highs or close to completing very large basing patterns after prolonged downtrends. Both are strong contributors to overall stock market health when they materialize.

#StayAlert and have a great weekend, –Julius

You Might Also Like
  • Financials Primed to Beat Tech in December!
  • Wrong Data Gets Wrong Answers
  • Sector Spotlight: Sector Rotation with Seasonality — A Strong Combination
  • Should You Be Worried About Poor Market Breadth?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Mega-Cap Leadership
next post
Progress for the Bulls, But Will It Hold?

You may also like

Trade Like Trevor

January 16, 2023

Granny Retail a Big Barometer: Video Analysis

June 23, 2023

The Great Rotation of 2023 Continues: Latest Updates and Insights

August 12, 2023

S&P & Tech Stocks: Will Seasonality Lead to More Pain?

March 28, 2025

Here’s How to Build Your Watch List for the End...

February 18, 2023

Is the Whole Country Buying Teslas and Eating at Wingstop?

February 16, 2023

Mastering MACD: The Fly-By Pattern

February 1, 2024

Bullish Tidings: Breadth Rallies, Oil Service Makes its Move, Bonds...

July 2, 2023

EQUITIES HIT ALL TIME HIGHS AGAIN WITH TECHNOLOGY IN THE...

June 17, 2024

The Ord Oracle March 14, 2023

March 15, 2023

    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

    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp up Max production, CEO says

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025
    • Analyzing SIL, USO, and NVDA: Could These Bullish Patterns Trigger?

      May 29, 2025
    • E.l.f. Beauty to acquire Hailey Bieber skin care brand Rhode in up to $1 billion deal

      May 29, 2025

    Popular Posts

    • 1

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

      June 27, 2024 2,763 views
    • 2

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

      August 9, 2024 2,470 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,449 views
    • 4

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

      July 10, 2024 2,428 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,306 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,104)
    • Investing (538)
    • Stock (2,578)

    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

    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp...

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,104)
    • Investing (538)
    • Stock (2,578)

    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

    The Ord Oracle April 18, 2023

    April 19, 2023

    How RRG Helps To Find Two...

    November 24, 2023

    The Halftime Show: Bullish and Bearish...

    March 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