Albemarle (ALB) saw a welcome improvement in its Relative Strength Rating (RS) before the market opened on Friday, rising from 90 to 93. Today’s midday action shows it falling back to the moving average of 10 and 200 days.
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When looking for the best stocks to buy and watch, one factor to keep a close eye on is relative price strength. IBD’s unique RS Rating identifies market leadership using a score from 1 (worst) to 99 (best) that shows how a stock’s price performance over the past 52 weeks matches up with all other stocks in our database.
History shows that stocks with the biggest gains tend to have an RS rating of 80 or better at the start of a new rally.
Looking for the best stocks to buy and watch? start here
Albemarle broke out earlier but has fallen below the previous entry of 273.78 from a cup with handle. In the scenario where a stock breaks out and then falls 7% or more below the entry price, it is considered a failed breakout. If this happens, it is best to wait for a new base to take shape. Also understand that the newest pattern is a later stage foundation and that these foundations are more prone to failure.
In terms of fundamentals, Albemarle has posted two quarters of profit growth. Sales earnings have also increased over the same time period.
The company earns the No. 1 rank among its peers in the specialty chemical industry group. Cabot (CBT) and CSW Industrials (CSWI) are also among the group’s most highly valued stocks.
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