Albemarle saw a welcome improvement to its Relative Strength (RS) Rating on Friday before the market opened, with an increase from 90 to 93. Midday action today shows it falling back to the 10 and 200 day moving average.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. IBD's unique RS Rating identifies market leadership by using a 1 (worst) to 99 (best) score that shows how a stock's price performance over the last 52 weeks matches up against all other stocks in our database.
History reveals that the stocks that go on to make the biggest gains tend to have an 80 or better RS Rating at the beginning of a new climb.
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Albemarle broke out earlier, but has fallen back below the prior 273.78 entry from a cup with handle. In the scenario where a stock breaks out then falls 7% or more below the entry price, it's considered a failed breakout. If that happens, it's best to wait for a new base to take shape. Also understand that the most recent pattern is a later-stage base, and such bases are more prone to failure.
Regarding fundamentals, Albemarle has posted two quarters of rising earnings growth. Sales gains have also increased over the same time frame.
The company earns the No. 1 rank among its peers in the Chemicals-Specialty industry group. Cabot and C S W Industrials are also among the group's highest-rated stocks.
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