On Friday before the open, Albemarle hit an important technical milestone, with its Relative Strength (RS) Rating climbing into the 80-plus percentile with an upgrade to 87, an increase from 66 the day before. That did not stop the stock price from dropping 10%.
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 action over the last 52 weeks matches up against other publicly traded companies.
History reveals that the best-performing stocks typically have an RS Rating of at least 80 in the early stages of their moves.
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The stock is not near an ideal buy zone, especially today. Following yesterday's big move up, today's big drop is worrisome. Best to wait and see what happens to the cup-with-handle pattern it had been forming. Today's drop even surprised the panelists on today's edition of IBD Live.
In terms of fundamentals, the company has posted four quarters of rising earnings growth. Top line growth has also risen during the same period.
Albemarle earns the No. 1 rank among its peers in the Chemicals-Specialty industry group.
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