Energy stocks have been the best-performing group thus far during the second half of 2023. However, they have given back some of their gains in recent weeks as selling pressure resurfaces.
With energy indexes rolling over at their old highs yet again, the question we’re asking (and have been asking) is simple…
What is it going to take for these stocks to finally break out?
Here is a dual-pane chart showing the Equal-Weight Energy Sector testing the upper bounds of a multi-month basing pattern on both absolute and relative terms.
Our Hall of Famers list is composed of the 150 largest US-based stocks.
These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.
It has all the big names and more.
It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.
The Hall of Famers is simple.
We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.
Let’s dive right in and check out what these big boys are up to.
From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.
However, when it comes to our latest project, it couldn't be any simpler!
With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.
Welcome to The Junior Hall of Famers.
This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.
One of the better indicators of a healthy bull market is when you see Consumer Discretionary stocks (the things we want) outperforming Consumer Staples stocks (the things we need).
The ratio between Discretionary and Staples is one we look at during bull markets, to confirm what the indexes are doing, as well as in bear markets to find divergences that may turn before the indexes themselves (see '08-'09).
This really has been one of the more reliable indicators for many years.
And wouldn't you know it, as pessimism spikes, volatility pops, and the permabears begin to pound their chest again, Discretionaries are putting in higher lows relative to Staples.
This is classic sector rotation we see during healthy market environments:
