In fact, the difference between the number of stocks on the New York Stock Exchange hitting new 52-week highs versus those notching new 52-week lows is now at its widest level since early 2021, Dean Christians, senior research analyst with SentimenTrader, noted in a recent report. In other words, more stocks are advancing than declining.
The recent surge in the spread between 52-week highs and lows on the NYSE…signals a notable improvement in market breadth, a hallmark of sustainable uptrends, Christians wrote in a report. Since stock indexes rarely peak when breadth broadens, the current uptrend will likely persist.
The last time the market showed similar momentum, the S&P 500 went on to rally by 14% over the next six months, Christians said. What's more, the blue chip index rallied nearly 90% of the time over the next 12 months by an average of almost 10%.
He was particularly encouraged by the performance of interest-rate-sensitive sectors and so-called bond proxies such as financials, real estate, and consumer staples. These have been among the market leaders during prior instances where more stocks have been hitting new highs.