Technical Analysis of Stocks You Can Count On
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:
Average Weekly Hours Manufacturing
Non Farm Average Weekly Hours
Household Debt and Servicing
Building Permits New Private Housing Units
Interest Rate Yield
Real Median Household Income
Industrial Production Index
Real Manufacturing Trade Industries Sales
Changes In GDP
Average (Mean) Duration of Unemployment
Consumer Price Index
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.
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