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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.
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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. |
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Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our . |
