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posted on 01 June 2016

CGTS Top 25: Is AZO The Best Stock In The Market

by Michael Clark

When I first started investing, Investor's Business Daily was a wonderful resource. I especially like their Relative Strength Index. Stocks with a RS above 95 were sure winners (I thought). When I began creating market indicators I sought to develop my own Relative Strength Indicator. I have been trying to improve this indicator for decades now.

Here is a list of the Top 25 and Bottom 25 issues in our database. Our RS indicator is a modified version of our CGTS Resistance System. This says Autozone (NYSE:AZO) is the best stock in our CGTS Universe. Hard to argue with this. The worst stock? Sandridge Energy.

Note in the report below for issues in the Top 25 that are down-trending. A stock that is in the Top 25 while in a correction should be recognized for its strength. One can note a downtrend by either or both the PROP1 column (below -7) and/or the Intermediate Trend column (-1). We will look at some charts of these issues below.

One of the stocks we have been wanting to buy is in this group of Top 25 stocks, in a current downtrend: HMY, Harmony Gold Corp. There are others.

In the Bottom 25 we see a lot of recognizable names, including VIX, Inverse ETFs, copper, coffee. Don't believe people who claim the global economy is recovering because oil and gold stocks are in rally mode. This is coming after more than a year of active selling -- these issues are in a reflex market recovery. But the global market is still contracting. Watch copper, and weep.

One issue in the Bottom 25 deserves note. The very volatile 3x ETFs are outliers here, in that they move quite rapidly back and forth. Note: JNUG, Junior Miners Gold Bullish ETF 3x. It is currently in the Bottom 25 (-.417); two weeks ago its relative strength was +.517. This is the same story for NUGT.

A method: we are going to watch the Top 25 and the Bottom 25 with the understanding that the Top 25 are issues to buy and the Bottom 25 are issues to short. When Top 25 issues, in a PROP1 SELLZONE decline, pop back up into the BUYZONE, they become natural buys. None of the Bottom 25 issues are in the PROP1 BUYZONE. A few issues are Intermediate-Trend Positive: JO, ENDP, RUSS (Short Russian Stocks ETF). These issues, unless they can break into the PROP1 BUYZONE, are shortsale candidates. They are rallying, weak rallies, which will be destined to peter-out and turn back down. Even Bottom 25 issues that break into the PROP1 BUYZONE are not out of the woods. These can very easily return to the shortsell grid, after a failed attempt to rally.

Column1Column2Column3Column4Column5Column6Column7
CGTS RELATIVE STRENGTH
TOP 25CLOSECGTS REL SINT TRENDPROP 1COMPANY
1AZO765.750.87911Auto Zone
2STZ157.820.8791-7Constellation Brands
3UNH1340.86615United Healthcare Daily
4SPG197.770.85513Simon Property Group
5HSIC173.80.80817Henry Schein
6AFG73.250.80415American Financial Group
7MA97.180.79615MASTERCARD
8HMY2.920.792-1-25Harmony Mining
9AP4.SI0.930.785-1-19RIVERSTONE HOLDINGS
10HD133.940.77611Home Depot
11BSX22.580.7721-1Boston Scientific
12NOC214.420.7671-1Northrup Grumman *
13FISV105.130.76415Fiserve Inc
14MO63.960.7581-1Altria Group
15QQQ110.1090.75813Powershares Nasdaq $
16TARO149.20.757-1-9Taro Pharma
17MKL967.740.757119Markel Daily
18CDE7.280.751-1-5Coeur D'Alene Daily
19AG10.350.747-1-3First Majestic Silver
20FRT153.60.7421-7Federal Realty Trust
21BMY71.310.7411-5Bristol Meyers
22BCS-PD26.060.7361-3Barclays APD
23SNA162.550.7281-13SNAP-ON INC
24KR35.710.725-13Kroger
25PKW46.290.72313BUYBACK ACHIEVERS ETF
BOTTOM 25CLOSECGTS REL SINT TREND COMPANY
26VXX13.6-0.343-1-25VIX ETF
25SPWR17.26-0.3491-19Sunpower
24NUGT70.87-0.359-1-25* Gold Miners Stocks Bullish ETF 3x (NYSE:O)
23CVV7.11-0.4061-15CVD Equipment
22DBB12.54-0.4071-19Base Metals ETF
21JNUG99.12-0.417-1-25* Junior Gold Miners Bullish ETF 3x
20FRO8.02-0.453-1-15Frontline Limited Shipping
19SPU1.73-0.578-1-25SkyFruit Juice China
18^VIX13.07-0.682-1-23CRB Volatility Index Daily
17JJM19.474-0.6871-15Industrial Metals ETN
16ENDP15.38-0.7071-17Endo Pharmaceuticals
15TNK3.49-0.721-1-25Teekay Tankers Ltd.
14JO18.34-0.7211-25Coffee ETF
13JJC24.08-0.74-1-19Copper ETF
12DWTI71.96-0.754-1-19* Crude Oil Bearish ETF 3x (NO)
11WDRW28.01-0.823-1-21* Regions Banks Bearish ETF 3x (NO)
10MYY14.92-0.961-1-23Short Midcap Index Short
9SBB48.405-1.099-1-21Short Small Cap 600 S&P ETF Daily
8CLMT4.06-1.268-1-17Calumet Speciality
7QLTI1.49-1.362-1-17QLT Inc (Biotech)
6RUSS15.48-1.4011-25* Russian Stocks Bearish ETF 3x
5SH19.93-2.596-1-23Short SP 500 ETF
4PSQ51.97-2.712-1-23Short QQQ Index ETF
3OREX0.417-2.8381-19Orexigen Pharmaceuticals
2SZK19.68-3.524-1-25Short Consumer Goods
1SDOCQ0.015-3.545-1-25Sandridge Energy

Here are some stocks to watch from the Top 25: we especially like HMY and SNA, Snap-On Inc in this group.

Here are a couple to watch from the Bottom 25, NUGT to trade when it moves back into the PROP1 BUYZONE -- others, perhaps, to re-short.

This is the "worst stock" in our database at the moment.

Hope you find this interesting. We plan to turn this into a major feature of our newsletter.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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