(Relative Rotation Graph)
Stocks move in and out of favor. Relative Rotation Graphs (RRG) track these changes and help investors be in the right place at the right time!
1. What is hot and what is not - TPA-RRG captures the inevitable movement of stocks into and out of favor.
2. Scores and ranking - Clients can quickly see which stocks are showing the best and worst relative strength characteristics. TPA found that using RRG’s was very beneficial, but took time to parse through, so we simplified the process by creating a score for each stock and sector.
3. The best of both worlds; RRG & TPA - Now, clients can use TPA-RRG scores and rankings to identify stocks that are not only moving into favor, but are also technically positive.
4. TPA-RRG analyzes every stock in the Russell 1000 and 25 major sector & subsector ETFs
CLICK on the image to the left for an example of a recent TPA-RRG Report!!
Click the image below for an example of sector ETFs rotating in and out of favor!
Important things to keep in mind:
1. The power of RRG is that it replicates the real-life movement of stocks in and out of favor. Stocks move from the Improving quadrant to the Leading quadrant, but inevitably start to underperform at some point. They then move into the Weakening quadrant and finally into the Lagging quadrant, before they repeat the cycle again.
2. TPA-RRG scores and ranking focuses on catching the moment when stocks are changing from Lagging to Improving to Leading and tries to avoid stocks that are moving from Leading to Weakening to Lagging
3. The tails for stocks in the RRG represent 10 weeks of movement.
4. The video shows the past 2 years of RRG for each stock.