Technical Analysis of Stocks You Can Count On

TRENDS Monthly = Business & Financial Cycle Analysis +

Sectors & Stocks Relative Rotation Analysis + Individual Stock Chart Analysis 

TRENDS Monthly and TRENDS Intramonth combines technical analysis with relative rotation graph analysis and macroeconomic analysis to identify stocks within the S&P 500 that show potential to outperform the S&P 500 benchmark.

And just as important, TRENDS reports also identify when the outperforming stocks may have peaked and in turn may start or have started to underperform the S&P 500 benchmark.

TRENDS Methodology Overview

1. Business & Financial Cycle Analysis

The beginning of the technical analysis process starts with locating where the stock market may be in the current business cycle. To do this the following accepted indicators are used:

 

Leading Indicators

 

Stock Market

Manufacturing Activity

Average Weekly Hours Manufacturing

Non Farm Average Weekly Hours

Inventory Levels

Retail Sales

Housing Market

Household Debt and Servicing

Consumer Debt

Building Permits New Private Housing Units

Interest Rate Yield

 

Coincident Indicators

 

Real Median Household Income

Unemployment Rate

Industrial Production Index

Real Manufacturing Trade Industries Sales

 

Lagging Indicators

 

Changes In GDP

Average (Mean) Duration of Unemployment

Consumer Price Index

Corporate Profits

Balance of Trade

 

Data for the business and financial cycle analysis comes from FRED - Federal Reserve Bank of St. Louis.

2. Sectors Relative Rotation Analysis

Relative Rotation Graphs (RRGs) of sectors are then generated and analysed.

 

The RRGs analysis will identify the sectors within the S&P 500 that are likely to outperform the S&P 500 benchmark. From this analysis, a short list of possible sectors to analyse in more depth is drawn up.

 

Note: If the conclusion from the RRGs analysis agrees with the business and financial cycle analysis, then there can be more confidence in the conclusion. If the conclusion from the RRGs analysis differs from the business and financial cycle analysis, then more weight would be given to the RRGs analysis

3. Stocks Relative Rotation Analysis

Relative Rotation Graphs (RRGs) of identified stocks are then generated and analysed. 

 

The RRGs analysis will identify stocks within the identified sector(s) that are likely to outperform the sector benchmark.

4. Stocks Individual Chart Analysis

The end of the technical analysis process is to employ a variety of technical analysis tools to determine if  the identified stocks are trending or not (i.e., support the RRGs of stocks analysis) and to calculate possible targets.

 

At the same time, a variety of technical analysis tools are employed to review previously identified stocks to see if they may have peaked and may change to underperform. 

 

The technical analysis tools employed are:

 

Candlestick Patterns

Trend Lines

Support and Resistance

Volume 

On Balance Volume

Relative Strength Indicator

Average True Range

Average Directional Indicator

Chart patterns

Gaps

5. TRENDS Monthly & TRENDS Intramonthly

During the Early Access time period, from September 2019 to February 2020, the  TRENDS Monthly, TRENDS Intramonth, and TRENDS Monthly Stock Watch reports will be available for free to the general public. 

 

A free subscription to TRENDS includes:

  • TRENDS Monthly (published first week of each month)
  • TRENDS Intramonth (published mid month)
  • TRENDS Monthly Stock Watch (published daily)

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