COMMUNICATION SPDR STILL TESTING 200-DAY LINE -- INTERNET STOCKS ARE LEADING IT HIGHER -- USING SCTR RANKINGS TO FIND STOCK LEADERS
XLC CONTINUES TO TEST 200-DAY LINE... Tuesday's message showed the Communication Services SPDR (XLC) challenging its 200-day moving average. Chart 1 shows that test still in progress. Its relative strength line in the lower box has also been rising. Internet stocks are the main driver behind recent XLC gains.
INTERNET INDEX LEADS XLC HIGHER...Chart 2 shows the Dow Jones US Internet Index rising to the highest level since late February and well above its 200-day line. That index has been the strongest part of the XLC over the last three months. And several of its stocks reflect that absolute and relative strength.
USING SCTR RANKINGS TO FIND STOCK LEADERS... One of the simplest ways to find stock leaders in a group is to compare their SCTR rankings. SCTR stands for the StockCharts Technical Ranking System which uses six different technical indicators to compare a stock's performance relative to its peers. Higher SCTR rankings highlight stock leaders within a group. The following stocks show Internet stocks with the highest SCTR rankings.
INTERNET LEADERS... The following charts show the six Internet stocks with the highest SCTR ratings. Netflix (NFLX) which just hit a new record is the group leader with a 98 SCTR ranking. Activision Blizzard (ATVI) is second with SCTR rank of 97. Facebook (FB) is third with a SCTR rank of 92. Electronic Arts (EA) is next with a SCTR at 91. Take-Two Interactive Software (TTWO) follows with a SCTR at 87. The last chart shows Alphabet (GOOGL) which has a SCTR rank of 84. Using SCTR rankings is a good way to start the search for group leaders. The user can then utilize those rankings to choose stocks with the most promising chart patterns. The best part is that they're already dealing with leading stocks in a leading stock group. The XLC itself has a SCTR rank of 88 making it the market's third strongest sector. The two strongest are technology with a SCTR rank of 96 and healthcare with a rank of 91. The Internet group has a SCTR of 92 making it the strongest part of the XLC.
