April 17th Utilities Collapse Intraday Breadth Update and Stock Scan

Apr 17, 2014: 12:25 PM CST

What a difference a day makes!

In yesterday’s mid-day update, I highlighted a broader bullish signal from breadth, namely from weakness in utilities and strength in all other sectors.  The suggestion was that price would likely continue higher.

With today’s session another gap-up and trend event (so far), we saw that signal fulfilled; however, on today’s update on Breadth, we see a collapse of strength in Utilities!

Let’s take a look at the Sector Breadth and view our top trending stocks for today’s session:

I conducted a simple scan for stocks trading at new 52-week highs as of yesterday’s session and highlighted the concentration of Utility Sector stocks in the list.

Today’s intraday session reveals a collapse in the strength of utilities as well as Treasuries/bonds which are also falling sharply during today’s session.

Nevertheless, as has been the case for the last few sessions, Energy ($XLE) is again one of the top sectors in terms of relative strength/stock breadth.

It’s interesting to see a stair-step progression in terms of money flow across the sector groups as we see above.

Look to concentrate your attention in Materials, Industrials, and Energy stocks should the broader trend continue.

Here are our four leading stock (trending) candidates for today’s session as of mid-day:

Hasbro Inc (HAS), Lorrilard (LO – a repeat performer), Chesapeake Energy (CHK), and Chevron Corp (CVX).

Instead of select the top four stocks from our algorithmic scan for relative strength, I wanted to highlight something interesting:

This is the scan data from an algorithm/formula I use in TradeStation.  The stocks listed above top the list of “strongest intraday downtrend” or relative weakness so far in today’s session.

What fascinates me is that seven of the top ten downtrending candidates are Financial Sector companies.  Given the sector performance grid above, I would have expected to see more Utilities or Consumer Staples stocks but that’s not the case from the scan data above.

The rogue stock names today include Philip Morris (PM), IBM, and Bed Bath & Beyond (BBBY).

You can take a look at each of these stocks to see if any of them match your criteria for intraday trend trading candidates.

Remember, when using these type of scans, look beyond individual stocks (or even sectors) to find patterns of broader money flow.

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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