On the Relative Rotation Graph holding the 30 stocks in the DJ Industrials index, McDonald's (MCD) is one of the names that pop up as potentially interesting. The stock is positioned inside the improving quadrant for a few weeks now and moving towards the leading quadrant at a strong RRG-Heading.
Especially the last segment of the trail shows the increasing relative strength against the S&P 500.
Bringing up the price chart for MCD this morning was actually a pleasant surprise among all the misery on global stock exchanges around the world.
With the DJ Industrials down 2.9% in the past two days and MCD UP a whopping 6.3% this is true relative strength at work. On the daily version of the RRG, MCD is pushing strongly into the leading quadrant already.
The price chart (weekly) of MCD confirms this relative strength. First of all with the RS-Line pushing against heavy overhead resistance and on the verge of breaking to new highs. This increase in RS is pushing the RRG-Lines higher and they are rising in tandem and close to driving MCD into the leading quadrant on the Relative Rotation Graph.
But most importantly, the price is breaking to new highs and therefore truly bucking the current trend in equities.
This is a remarkable sign of (relative) strength that should not be ignored.
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Julius de Kempenaer | 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 of 2011 and was released on StockCharts.com in July of 2014.
After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers).