One important metric to look for in a stock is an 80 or higher Relative Strength Rating. La-Z-Boy cleared that benchmark Tuesday, with a jump from 75 to 81 Tuesday.
This proprietary rating identifies technical performance by showing how a stock's price action over the last 52 weeks compares to that of other stocks on the major indexes.
History reveals that the best-performing stocks typically have an RS Rating of above 80 as they begin their biggest runs.
Risk Management In The Stock Market: How Much Money To Invest Now
La-Z-Boy broke out earlier, but has fallen back below the prior 45.23 entry from a consolidation. In the case 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 pattern to take shape. Also keep in mind that the most recent consolidation is a later-stage base, and those involve more risk.
La-Z-Boy showed -4% earnings growth in the latest quarterly report. Revenue rose 2%.
The company holds the No. 2 rank among its peers in the Retail-Home Furnishings industry group. Williams-Sonoma is the top-ranked stock within the group.
RELATED:
Which Stocks Are Showing Improved Price Performance?
Why Should You Use IBD's Relative Strength Rating?
How Relative Strength Line Can Help You Judge A Stock
Ready To Grow Your Investing Skills? Join An IBD Meetup Group!
