Don't Ignore This Chart

Canadian Healthcare and Financial Services winning over Energy

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While browsing through some pre-populated RRGs on the site I stumbled upon the chart holding Canadian sectors.

What immediately triggered me was the sharp move of the Healthcare sector into the leading quadrant at almost 45 degrees which means that the sector is moving higher on both axes which is a strong sign.


In a closed universe like this, if something moves up something else must go down to offset the move. And in this case, that seems to be the Energy sector which just crossed over into the lagging quadrant in pretty much the exact opposite direction as Healthcare.

$SPTEN is also moving in an almost straight line at an RRG-heading 0f 225 degrees, which means going lower on both scales.

While scanning the other sectors in this universe, another one that looks interesting enough for further inspection is the Financials Services sector ($SPTFS).

This sector just crossed over into the leading quadrant from improving which raises the question about which sector could have the most potential? Health Care is already deep into the leading quadrant and therefore is in a more established trend while Financial Services has only just crossed over and therefore probably just at the beginning of a new, potential, relative uptrend.

After studying the charts of both the Healthcare and the Financial Services sector my preference goes to Healthcare as this sector has already broken some overhead resistance levels where Financial Services has a few more hurdles to overcome before upward potential really gets unlocked.

 

 

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Julius de Kempenaer | RRG Research
RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered TradeMarks ®; of RRG Research

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Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January 2011 and was released on StockCharts.com in July 2014. A graduate of the Dutch Royal Military Academy and former captain in the Dutch Air Force, Julius first began his career in the financial industry in 1990 as a portfolio manager. He is now the director/owner of RRG Research in Amsterdam. Learn More
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