One important metric to look for in a stock is an 80 or higher Relative Strength Rating. Mercury Systems just hit that mark, with a jump from 79 to 82 Monday.
IBD's unique RS Rating tracks technical performance by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the trailing 52 weeks matches up against the rest of the market.
Over 100 years of market history shows that the stocks that go on to make the biggest gains typically have an RS Rating of at least 80 as they launch their biggest runs.
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Mercury Systems broke out earlier, but is now approximately 3% below the prior 42.72 entry from a cup without handle. If a stock you're tracking clears a buy point then falls 7% or more below the original entry price, it's considered a failed base. Wait for the stock to set up and breakout from a new chart pattern and entry price. Also understand that the most recent consolidation is a later-stage base, which makes it riskier to establish a new position or add shares to an existing one.
Earnings growth dropped in the most recent quarter from 109% to 0%. But sales moved higher, from -2% to 13%.
The company holds the No. 20 rank among its peers in the Aerospace/Defense industry group. M-tron Industries, Heico Cl A and Howmet Aerospace are among the top 5 highly rated stocks within the group.
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