A quick follow up on my post comparing SWC – Stillwater Mining and ANO – Anooraq Resources where I compared the implication of overhead resistance on price performance. Today SWC was up 6% while ANO couldn’t move up. Both trade in the same sector, therefore it is indeed comparing apples with apples. From a technical trader’s perspective the main difference lies in the fact SWC has less overhead resistance than ANO. Today’s performance is a great reminder you should always go with the stock that has the least overhead resistance within a specific sector.
I thought it would be interesting to present a list comparing two stocks within a sector with distinctly different overhead resistance characteristics. In the long run you will significantly increase your overall performance if you force yourself to buy strength and go with the stocks that display less overhead resistance than its peers. I have stated it numerous times, but it is well worth repeating it: The number one performance killer is ‘Overhead Resistance’. On to the comparisons:
- CYD – China Yuchai vs. CAAS – China Automotive Systems
- BIDU – Baidu vs. GOOG – Google
- SWC – Stillwater Mining vs. ANO – Anooraq Resources
- PPO – Polypore vs. WLK – Westlake Chemical
- LIM.TO – Labrador Iron Mines vs. BIM.TO Baffinland Iron Mines
- GMO – General Moly vs. TC – Thompson Creek Metals
- BTN – Ballantyne Strong vs. CIDM Cinedigm Digital Cinema
- HOV – Hovnanian Enterprises vs. RYL – Ryland Group
Each pair is trading within the same sector. The one mentioned first has significantly less overhead resistance. The second one has much more pronounced overhead resistance. It is quite simple. Odds the ones with less resistance will outperform and the ones with more overhead resistance will underperform are extremely high. Clicking on the links will direct you to the Sector Overview Charts for a direct comparison of the two stocks mentioned. Listen to the charts.
The successful investor is not invested in the market all the time. There are many times when you should be completely in cash. If you are unsure of the direction of the market, wait. – Jesse Livermore
My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469
Have a great evening!
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