While the market rebound this week has been very positive, some rebounds for individual stocks have been better than others. When looking for names for your watch list, it’s best to focus on stocks with top-notch relative strength, meaning outperformance over the S&P 500.
While these stocks are not actionable, it’s good to get in the habit of tracking stocks with superior relative strength. Investors should focus on the true market leaders. The stocks below were outperforming the S&P 500 heading into the market sell-off, held up well during the brief stock market correction, and have posted strong gains this past week.
Netflix has been on a massive run this year, and was so far extended from its latest buy point heading into the correction that no sell signal was ever triggered and no technical support levels were in question. Netflix shares are closing in on the prior high of 286.81, with the relative strength line hitting a new all-time high on Thursday.
During the recent market volatility, Ferrari never even came close to touching its 50-day moving average. Shares dipped below the buy range from a base that was originally cleared several weeks ago, but held up relatively well. Ferrari is now slightly extended from the 5% buy zone and hitting a new high, as the relative strength line hits a new short-term high as well.
IBD’S TAKE: Even if a stock has superior relative strength, you need to wait for it to present a buying opportunity before you start or increase a position. To learn more about how to properly buy stocks, check out the How To Invest section of our site.
After finding support at the 50-day moving average, Adobe is now extended 8% from a 186.37 buy point first cleared close to the beginning of the year. The relative strength line is holding near highs as Adobe looks to notch a new weekly closing high.
The only recent session that had AbbVie touching its 50-day line ended with the stock reversing higher with the market. Shares are now once again more than 20% extended from a flat base with a 98.36 buy point. The RS line is now even with the prior high, reached in a post-earnings move of 14% on Jan. 26. AbbVie announced Thursday a new $10 billion stock buyback program and a 35% increase in its quarterly dividend to 96 cents a share.
With a sizable stake from Oprah Winfrey since 2015, the “Oprah boost” has lifted Weight Watchers for many quarters now, and the stock was hardly impacted by the bout of volatility. Weight Watchers shares are at all-time highs and up 43% from a cup-with-handle breakout over a 52.17 buy point in early January.
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