When looking for the best stocks to buy and watch, focus on those with rising relative price strength.
One stock that fits that bill is Worthington Industries, which saw a positive improvement to its Relative Strength (RS) Rating on Thursday, based on Wednesday's trading. It moved higher with an upgrade from 90 to 93. Unfortunately, it gapped down at the open and has stayed lower, down 13% as of this writing.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. IBD's proprietary RS Rating measures market leadership 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 reveals that the stocks that go on to make the biggest gains typically have an 80 or better RS Rating in the early stages of their moves.
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Now is not an ideal time to jump in since it isn't near a proper buy zone. It has also given back all gains from a previous cup with handle breakout. Now we wait to see if the stock can digest the recent earnings results (see below) and bounce back. Look for a new buy point as we enter the final quarter of the year.
WOR Earnings
Earnings growth declined in the most recent report from 73% to 28%. But revenue gains moved higher, from -19% to -15%.
The company holds the No. 3 rank among its peers in the Metal-Fabricators industry group. DMC Global, RBC Bearings are among the top 5 highly rated stocks within the group.
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