Thursday, May 07, 2009

Highest Percentage Of Stocks Above 50 Day M.A. Since Mid-2006


The highly respected folks at Bespoke Investment Group has further evidence confirming the current market rally. It will take a lot to derail the current uptrend. According to the people at Bespoke Research, as the market continues to rally, the percentage of companies now trading above their 50-day moving averages also continues to rise. As shown below, 92% of the stocks in the S&P 500 are now trading above their 50-days. This is by far the highest reading since mid-2006, and it is indicative of extremely strong market breadth.

Spx50day505

Every sector except Health Care and Consumer Staples has a >50-DMA reading of more than 90%. The Consumer Staples sector is at 88%, and Health Care is at 75%. Telecom only has 9 stocks in the sector, and all of them are trading above their 50-days. The Industrials sector ranks second at 98%, followed by Energy and Utilities at 97%. While still high, Financials and Consumer Discretionary have actually seen a decline in the percentage of stocks above their 50-days over the last week. The indicator maxes out at 100%, so there isn't currently much upside room from a breadth perspective. A pullback in these extraordinary numbers would be neither surprising nor unhealthy.

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Inftenrs505

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p/s photos: Deepika Padukone



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