The Importance of Industry Group Relative Strength
Knowing which Industry Groups the Institutional Money is flowing
into and out of is very important to recognize. If your invested in Stocks
that reside in low Relative Strength Industry Groups then they may remain
poor performers until that Industry Group shows signs of increasing Relative
Strength. Sometimes it can take many months or even a few years before
an Industry Group will finally begin to show signs of life.
Lets look at a couple of Industry Groups over the past few years and
see how they compare based on Relative Strength and Price Performance. The
Gold and Silver Sector has been very strong since the first of the year which
has been reflected in its Industry Group Relative Strength and Year to Date
price Performance.
Notice how this Industry Group was strong in the Fall of 2001
but gradually became out of favor in November and December of 2001 as the Groups
Relative Strength dropped to 8 (highlighted in blue). However things began
to change by January as the Group's Relative Strength began to increase and has
been very strong since February with values consistently in the 90's
(highlighted in red).
Weekly Industry Group Relative Strength for Mining-Gold/Silver/Gems
(10/19/01-5/24/02)
| 5/24/02 |
5/17/02 |
5/10/02 |
5/3/02 |
4/26/02 |
4/19/02 |
4/12/02 |
4/5/02 |
| 99 |
99 |
99 |
91 |
97 |
99 |
98 |
98 |
| 3/29/02 |
3/22/02 |
3/15/02 |
3/8/02 |
3/1/02 |
2/22/02 |
2/15/02 |
2/8/02 |
| 99 |
99 |
86 |
94 |
99 |
99 |
99 |
99 |
| 2/1/02 |
1/25/02 |
1/18/02 |
1/11/02 |
1/4/02 |
12/28/01 |
12/21/01 |
12/14/01 |
| 96 |
77 |
87 |
80 |
53 |
24 |
42 |
8 |
| 12/7/2001 |
11/30/01 |
11/23/01 |
11/16/01 |
11/09/01 |
11/02/01 |
10/26/01 |
10/19/01 |
| 59 |
76 |
74 |
78 |
69 |
90 |
93 |
94 |
If we look at the individual stocks in the
Mining-Gold/Silver/Gems Industry Group all of them have performed well except
for one. The Average Year to Date Return for the Group since January 1st
is over 130% as of May 24, 2002. This is why it's important to notice
which Industry Groups are starting to show signs of increasing Relative
Strength.
|
Price |
Price |
YTD |
| Mining-Gold/Silver/Gems |
12/31/01 |
5/24/02 |
Return |
| VGZ |
0.05 |
0.52 |
940% |
| BGO |
0.31 |
1.92 |
519% |
| HL |
0.94 |
4.36 |
365% |
| CBJ |
0.44 |
1.63 |
273% |
| KGC |
0.76 |
2.79 |
268% |
| DROOY |
1.38 |
5.04 |
267% |
| RIC |
1.19 |
4.30 |
262% |
| RGLD |
5.19 |
15.40 |
197% |
| HGMCY |
6.51 |
18.11 |
178% |
| GLG |
3.61 |
9.69 |
169% |
| TVX |
0.43 |
1.15 |
168% |
| RANGY |
2.88 |
6.66 |
131% |
| CAU |
1.02 |
2.13 |
108% |
| CDE |
0.80 |
1.64 |
106% |
| ECO |
0.52 |
1.03 |
97% |
| PAAS |
4.19 |
8.09 |
93% |
| GG |
12.16 |
22.27 |
83% |
| SSRI |
2.65 |
4.85 |
83% |
| AU |
18.05 |
32.95 |
83% |
| MDG |
10.33 |
18.65 |
81% |
| AEM |
9.87 |
17.40 |
76% |
| SIL |
10.00 |
16.58 |
66% |
| NEM |
19.11 |
30.94 |
62% |
| ASL |
4.25 |
6.38 |
50% |
| ABX |
15.95 |
23.16 |
45% |
| LIHRY |
11.84 |
16.00 |
35% |
| ABERF |
12.66 |
17.08 |
35% |
| PDG |
10.91 |
14.38 |
32% |
| KRY |
1.77 |
2.20 |
24% |
| CFCM |
3.00 |
0.77 |
-74% |
Now lets look at a Industry Group (Medical-Generic Drugs) which
has been exhibiting low Relative Strength values over the past several
weeks. Notice in the table below how this Industry Group was strong
in the Fall of 2001 but quickly fell out of favor as the Relative Strength
values dropped from 96 in October to as low as 1 by January of 2002 (highlighted
in blue). During the past several weeks the Relative Strength values have
continued very low (highlighted in red) as this Industry Group has remained out of favor with the
Institutional Money.
Weekly Industry Group Relative Strength for Medical-Generic Drugs
(10/19/01-5/24/02)
| 5/24/02 |
5/17/02 |
5/10/02 |
5/3/02 |
4/26/02 |
4/19/02 |
4/12/02 |
4/5/02 |
| 11 |
11 |
5 |
5 |
3 |
2 |
1 |
2 |
| 3/29/02 |
3/22/02 |
3/15/02 |
3/8/02 |
3/1/02 |
2/22/02 |
2/15/02 |
2/8/02 |
| 1 |
1 |
1 |
1 |
2 |
2 |
2 |
2 |
| 2/1/02 |
1/25/02 |
1/18/02 |
1/11/02 |
1/4/02 |
12/28/01 |
12/21/01 |
12/14/01 |
| 6 |
2 |
4 |
1 |
1 |
3 |
3 |
30 |
| 12/7/2001 |
11/30/01 |
11/23/01 |
11/16/01 |
11/09/01 |
11/02/01 |
10/26/01 |
10/19/01 |
| 30 |
23 |
31 |
29 |
36 |
73 |
91 |
96 |
If we look at the individual stocks that make up this Industry
Group several of them have been performing very poorly since Jaunary 1st with an
Average Year to Date Return of -16% through May 24, 2002..
|
Price |
Price |
YTD |
| Medical-Generic
Drugs |
12/31/01 |
5/24/02 |
Return |
| MRVT |
9.61 |
0.83 |
-91% |
| ISPH |
14.09 |
2.80 |
-80% |
| ELN |
45.05 |
10.33 |
-77% |
| CLPA |
6.95 |
2.00 |
-71% |
| FMTI |
1.84 |
0.56 |
-70% |
| AEGN |
3.50 |
1.36 |
-61% |
| INHL |
18.55 |
7.58 |
-59% |
| AVN |
4.27 |
1.88 |
-56% |
| MOGN |
15.27 |
7.23 |
-53% |
| AMRN |
17.38 |
8.53 |
-51% |
| BCII |
17.13 |
9.87 |
-42% |
| BPRX |
20.75 |
12.20 |
-41% |
| IBPI |
2.73 |
1.63 |
-40% |
| KOSP |
34.59 |
20.70 |
-40% |
| BMY |
51.00 |
30.92 |
-39% |
| DMI |
6.9 |
4.44 |
-36% |
| BVF |
56.25 |
36.30 |
-36% |
| KG |
42.13 |
28.60 |
-32% |
| XNVA |
11.77 |
8.51 |
-28% |
| FLML |
2.72 |
1.98 |
-27% |
| SLXP |
20.25 |
15.21 |
-25% |
| SGP |
35.8 |
27.08 |
-24% |
| MRX |
64.59 |
49.25 |
-24% |
| CIMA |
36.15 |
27.90 |
-23% |
| OPHM |
4.48 |
3.47 |
-23% |
| QSC |
2.09 |
1.62 |
-22% |
| MCHM |
3.05 |
2.39 |
-22% |
| SHPGY |
36.59 |
29.33 |
-20% |
| NVO |
40.09 |
32.40 |
-19% |
| ORPH |
13.15 |
10.75 |
-18% |
| LLY |
78.54 |
64.85 |
-17% |
| ICN |
33.5 |
27.69 |
-17% |
| FHRX |
29.38 |
24.71 |
-16% |
| SYMBA |
1.95 |
1.65 |
-15% |
| PFE |
39.84 |
36.20 |
-9% |
| GSK |
49.81 |
46.39 |
-7% |
| FRX |
81.95 |
76.50 |
-7% |
| PPCO |
20.05 |
18.76 |
-6% |
| ELI |
6.5 |
6.09 |
-6% |
| WYE |
61.36 |
58.39 |
-5% |
| ISV |
1.84 |
1.75 |
-5% |
| MRK |
58.8 |
57.50 |
-2% |
| AVE |
71.00 |
70.07 |
-1% |
| AZN |
46.59 |
46.55 |
0% |
| PHA |
42.65 |
43.20 |
1% |
| POZN |
5.25 |
5.40 |
3% |
| NSTK |
15.5 |
16.00 |
3% |
| PTIE |
9.16 |
9.50 |
4% |
| AXCA |
14.20 |
15.00 |
6% |
| CNCT |
11.9 |
12.80 |
8% |
| SCRI |
15.68 |
17.01 |
9% |
| ENDP |
11.66 |
12.70 |
9% |
| IG |
0.59 |
0.65 |
10% |
| BNT |
10.19 |
11.50 |
13% |
| RDY |
18.95 |
21.40 |
13% |
| SHR |
52.98 |
60.01 |
13% |
| CGPI |
8.09 |
9.45 |
17% |
| ATRX |
20.61 |
24.48 |
19% |
| NVS |
36.5 |
43.38 |
19% |
| UG |
5.2 |
6.20 |
19% |
| DRAX |
2.7 |
3.24 |
20% |
| POLXF |
2.27 |
3.00 |
32% |
| NOVN |
17.75 |
23.45 |
32% |
| SKYE |
8.55 |
11.50 |
34% |
| COB |
3.45 |
4.67 |
36% |
We track over 180 different Industry Groups each week as this
allows me to notice which Groups are showing signs of decreasing or increasing
Relative Strength and where the Institutional Money is flowing into or out
of. Recognizing these trends can be very beneficial to investors as
typically the best performing Stocks will reside in high Relative Strength
Industry Groups as shown by the above examples.
Signup today for a
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forming favorable Chart Patterns and reside in in a strong Industry Group
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