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U.S. Tech: Why Ratio Charts Are A Part Of Our Process

  • Writer: Lester Davids
    Lester Davids
  • Mar 30
  • 1 min read

If you're wondering why ratio charts matter and are often featured in our research, the performance of high beta shares relative to low volatility demonstrates why.


Since July (see initial note below), the long-time market leaders i.e. U.S technology shares have UNDERPERFORMED the broader market.


Ratio charts help traders understand which sectors or stocks to position themselves in for relative OUTPERFORMANCE and what to sell to avoid relative UNDERPERFORMANCE.


 

Previous Post (30 July 2024) - Positioning: High Beta vs Low Volatility

The chart highlights the S&P 500 High Beta ETF (SPHB) relative to the S&P 500 Low Volatility ETF (SPLV). Zooming out, my analysis highlights the failure of high beta shares to hold above the prior swing highs, while momentum (as per the 14-week RSI) is nearing a breach of the upward trend.


Bottom Line: Investors appear to be positioning themselves within low volatility shares/sectors while rotating out of shares/sector with a higher beta.



Lester Davids

Analyst: Unum Capital

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