These 5 S&P 500 Stocks Show New Highs On Declining Relative Strength

The S&P 500 on Friday hit another new high – it was brief as sellers showed up and the index closed lower by .01%. July has been a month of new highs. It’s also been a month of a declining relative strength indicator. This negative divergence between price and a key indicator might be a problem.

The RSI, as it’s known to price chart analysts, is a momentum oscillator. Developed by technical analyst J. Welles Wilder, Junior in the 70s, his work on the subject was first published in the book “New Concepts In Technical Trading Systems.” Forbes in 1980 called him “the premier technical trader publishing his work today.”

The issue is not just with the S&P 500. Big, well-known names within the index are also showing weakening relative strength per Wilder’s oscillator.

5 S&P 500 Stocks With Weakening RSI

S&P 500:

The red-dotted lines show the negative divergence between the direction of price and the direction of the RSI momentum oscillator.

Blackrock:

The big asset management firm hit a new high Friday and the relative strength indicator failed to confirm the move by coming in lower than it’s earlier July reading. The stock retreated from the higher price high during the session and closed lower by .16%. Blackrock is market capitalized at $170.97 billion.

Genius Sports Limited:

The price just hit a new high. The relative strength indicator peaked in November 2024 and did not accompany the stock on to a higher high on Friday. You can see how the 50-day moving average no longer trends upward. Genius Sports Limited has a market cap of $2.89 billion and it’s a member of the Russell 2000 small caps ETF.

MMM:

The relative strength indicator peaked in January and is now lower even as the stock’s price is hitting a new high. Friday’s volume is extraordinary. The candlestick is a bearish engulfing: the high is higher than the previous session and the low is lower than the previous session. MMM has a market cap of $82.47 billion.

Raytheon Technologies:

The aerospace and defense company with a market cap of $202 billion has a negative divergence on its daily price chart. The stock just hit a new high and, at the same time, the relative strength indicator could not make it above its mid-June reading. Note that July volume levels are subdued compared to earlier months.

Charles Schwab:

The RSI peak came in mid-May and the measure is now lower as the stock itself makes a new high on decent buying volume. Schwab remains in an uptrend as indicated by the direction of the 50-day and the 200-day moving averages. Market cap for the capital markets firm is $174 billion.

The RSI is only one indicator of momentum and should be seen in the context of other price indicators.

Stats courtesy of FinViz.com. Charts courtesy of Stockcharts.com.

No artificial intelligence was used in the writing of this post.

More analysis and commentary at johnnavin.substack.com.