The table below shows the performance of a universe of mid and large cap U.S. equities, broken down by relative strength decile and quartile and then compared to the universe return. Those at the top of the ranks are those stocks which have the best intermediate-term relative strength. Relative strength strategies buy securities that have strong intermediate-term relative strength and hold them as long as they remain strong.
Last week’s performance (10/4/10 – 10/8/10) is as follows:
The top quartile (stocks with the strongest relative strength) underperformed the universe last week. However, the 3rd quartile (still above average relative strength) did perform better than the universe. On a sector basis, the Energy sector, which has been a laggard for most of the past 12 months, was up over 3% last week. It will be interesting to see if Energy begins to move from a laggard to a leader or if that was just a short-term blip.
Posted by Andy Hyer 
