The Relative Rotation Graph above highlights the rotation of IRM (Iron Mountain Inc.) in comparison to the other stocks in the S&P Real-Estate sector (XLRE).
The sector itself is interesting to keep an eye on as it is positioned well inside the leading quadrant but rolling over, at high JdK RS-Ratio levels, on the weekly RRG. But it is inside the lagging quadrant and curling up on the daily RRG.
This setup suggests a longer-term (weekly chart) relative uptrend that goes through a pause/correction (daily chart). Assuming that the weekly trend is providing the long-term framework, the rotation through lagging on the daily RRG could be a good point to start looking for re-entry and find interesting stocks within the sector to play.
As IRM is a Real-Estate stock, which usually means high dividend impact, I prefer an unadjusted price chart to look for support/resistance and trendlines.
On this, weekly, chart IRM is running into an intermediate horizontal resistance level near $35 at the moment. The next more meaningful barrier will be around $37. An upward break of that level will free the way for a further advance to the previous peaks just above $41.
The strong rotation of IRM on the weekly Relative Rotation Graph above suggests support from a relative perspective which can also be seen in the raw RS-Line that is trying to break out of a 2.5-year downtrend and a nine-month trading range since December.
If this scenario works out then a solid close above $35 by the end of this week will be the trigger for a move towards $37. And a subsequent weekly close above $37 will trigger the next leg to $41.
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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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About the author:Julius de Kempenaer 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.