Looking for Good RS? Check out $AMAT and $ICHR – March 30, 2021
QQQ AMAT ICHR
This is Scott with your Chart of the Day. I want to take a look at 2 charts because as you know the market has been choppy. And when the market is choppy I don’t do much trading, but what I do is search for stocks that are out-performing, stocks that have great relative strength.
If you are not sure what relative strength is, my boss, your friend and mentor Dan Fitzpatrick, actually did a live webinar last week strictly about relative strength and looking for stocks that are outperforming the indexes. This is really important especially when things are kind of messy like they are right now.
You can see here on the QQQ’s ( NASDAQ: QQQ ), it has just been a nightmare scenario, this has been a mess. And so what I like to do is focus on those stocks that have good relative strength; stocks that are outperforming and holding up better than the general market and I have 2 for you tonight, one of which is Applied Materials ( NASDAQ: AMAT ).
While the QQQ ( NASDAQ: QQQ ) is all over the place Applied Materials ( NASDAQ: AMAT ), if I zoom out, is near it’s highs and holding in trend right above all its major moving averages. If I bring in a chart from MarketSmith I will show you what I mean. Here on a MarketSmith chart, MarketSmith does a great job of showing stocks that have relative strength, they have their RS rating.
Now, I am not promoting MarketSmith, I don’t work for MarketSmith, I pay the same amount that you pay. But what I like is the fact that this has a high RS rating. You can see this RS line is in a well-defined uptrend. Also, over here you can see how it has an EPS rating of 94; that’s pretty high. The Group Strength Rating is an A. The SMR is an A. The Accumulation Distribution is an A. The Composite Rating is an A. Look at these Earnings and Sales, it’s got all of the right material. So this stock is one that I think is worth keeping an eye on.
In fact, full disclosure, I have a small position in Applied Materials ( NASDAQ: AMAT ) right now. I ended up buying some here on this day and added on this day. The last 2-days I have just been kind of watching and waiting to see if it’s able to hold up while the market kind of figures out which direction it wants to go. This is why I like it, because it’s close to the highs and I want to see this continue higher. So if I were you and I didn’t have a position in AMAT( NASDAQ: AMAT ) I would probably want to have an alert on this stock right around 129.00. You want to see a move through 129.00 and a close above that level on higher than average volume.
Another stock to take a look at, that has good relative strength, is Ichor Holdings ( NASDAQ: ICHR ). This is another semiconductor stock that is right close to the highs. In fact, the pattern looks pretty similar to AMAT( NASDAQ: AMAT ), doesn’t it? We have a nice well-defined uptrend above all of the major moving averages, a little pullback bounce off of that daily 8-exponential period moving average today. Again I think you will want to see this make a new high for potentially an entry maybe around 52.50, so I am going to set an alert on that.
I don’t have a position in this stock yet, but again, it is one that I am watching because of its relative strength. Let’s look at it on MarketSmith, ICHR ( NASDAQ: ICHR ), the same kind of thing, a rising in relative strength. Their propriety RS rating is at a 91; let’s go over here, all of the important things, EPS, 93, Group Rating, A, SMR, A, Accumulation Distribution, A. It has got all of the right stuff, good Earnings and Sales.
Again, this is a stock, in my opinion, that you want to keep an eye on; because if the market does decide to figure out which direction going and that direction is up I think you are going to see some big moves come in both AMAT( NASDAQ: AMAT ) and ICHR ( NASDAQ: ICHR ). So keep these 2 stocks on your watch list, set some alerts and we will see how it plays out.
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