📈 Relative Strength

This tells you what stocks to focus on.

Relative Strength

One of the most important things you can do, especially when the market is dropping, is to look for relative strength.

When the market is going down, you need to find what is going up. This tells you where institutions are willing to risk money and it could be a sign of new leadership in the market.

It also tells you that if (and when) the market reverses to the upside, this stock has the potential to make an outsized move.

IWM Leading

Right now we are seeing relative strength in small caps.

You can see that the IWM is performing significantly better than both SPY and QQQ right now.

Because of this, I have my eye on some small cap names for trades, such as MBLY which we entered in the Alpha Chasers Community yesterday, and AEHR which is setting up.

Having an understanding of which index is showing relative strength gives you that focus to find the highest potential names.

We are also seeing relative strength in NVDA right now.

It is performing much better than the Nasdaq, so is another name that interests me.

I show other examples of relative strength and the stocks I am watching because of it here: