MU Shows Classic Relative Strength: How I Spotted the Move Before the Market

 

Today was a perfect example of how relative strength can give you an edge and even tip you off to a trade before most people notice it. Above is a 5-minute chart of MU, and in the lower pane I’ve plotted the SPY for comparison. Just after the open, the SPY began selling off, forming a series of lower highs and lower lows that continued until roughly 12:30 ET. While the market was clearly moving lower, MU was doing something very different, it was consolidating at the highs, barely giving back any ground.

This is exactly what I look for when scanning for relative strength. The stock that can hold up while the market is weak is often the one being quietly accumulated by strong hands. In my book, Master The Market With Relative Strength, I call this a classic setup: a stock that shows resilience during a market sell-off is often preparing for a move higher.

Notice how MU made higher lows relative to the SPY during this period. That’s the key clue for me, it signals under the-radar accumulation. When the stock finally broke out to a new high, it didn’t just drift up, it rallied all the way to the close, finishing at its high of the day. That’s exactly the kind of move I’m looking for, a stock that holds up while others are weak and then continues higher once the accumulation phase is complete.

What I love about today’s action is how clear-cut it was. Relative strength isn’t about guessing or hoping; it’s about observing which stocks are leading or holding up while others are lagging. MU was under accumulation by strong hands, and the breakout confirmed it. Traders who recognized this relative strength early would have been positioned for a solid edge.

This example reinforces a core lesson I talk about repeatedly, watching for relative strength versus the market can highlight stocks that are poised to move even when broader sentiment looks bearish. Today’s MU action is a textbook illustration of using relative strength to find stocks that give you an advantage and one that reminds me why this strategy has been so powerful over the years.

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