There are 255 stocks in the S&P 500 that trade on Market Relative Strength (RS) buy signals, but not all of them are created equal. Today, we look at stocks that have exemplified market leadership for over a dozen years.
There are 255 stocks in the S&P 500 that trade on market relative strength (RS) buy signals, but not all of them are created equal. For the uninitiated, a stock being on a market RS buy signal is generally a desirable trait, signaling sustained outperformance versus our benchmark (SPXEWI) and continued technical favor. Of the various technical indicators we follow, RS signals remain one of the most closely watched by many Dorsey Wright analysts because they often identify leadership trends that can persist for years—or even decades.
In previous versions of this report, we highlighted Danaher (DHR), which maintained a market RS buy signal from June 1993 until early 2023—a nearly 30-year streak. While no current stock is approaching that milestone, several names continue to exhibit impressive durability. W.R. Berkley (WRB) remains the current leader, having held a market RS buy signal since July 31, 2000, now at a quarter century years of uninterrupted leadership.
The table below highlights today’s “RS Aristocrats,” defined here as stocks that have remained on market RS buy signals for 12 years or longer. The results have been impressive. Since their respective signal dates, the 22 stocks have produced an average annualized return of 20.0%, versus roughly 8% for the market benchmark. On a cumulative basis, the average stock in the group has outperformed the market by more than 5,200%. Several names stand out for exceptional long-term performance. Apple (AAPL) has gained nearly 58,700% since moving to a market RS buy signal in 2004, while Amphenol (APH), Cadence Design Systems (CDNS), and Broadcom (AVGO) have each delivered more than 6,000% cumulative returns.
Importantly, an RS buy signal is just one component of our technical process. Some companies on the list currently carry more modest overall technical scores despite their long-term RS leadership. Honeywell (HON), for example, has maintained an RS buy signal since 2007 but modestly underperformed the benchmark over that span, and is currently a weak 2 for 5’er.
Ultimately, these “RS Aristocrats” represent a small group of stocks that have demonstrated remarkable consistency across multiple market cycles. History suggests that this type of sustained relative strength is rarely accidental, making these longer-term leaders worth continued attention from a technical perspective.
Among the aristocrats, Linde Plc (LIN) appears to be one of the most attractive current options. The 4 for 5’er trades on two consecutive buy signals and is close to breaking a triple top at $528. The stock moved to a positive trend in February and has pushed higher since then. The stock market has been on a RS buy signal since 2001, outperforming the market by almost 1,500% over that span. LIN trades in actionable territory near the middle of its ten-week trading band. Support lies nearby at $496, $472, and $448, with the bullish support line at $440.
