Rockwell Automation: A Closer Look

Rockwell Automation (ROK) recently saw its Relative Strength (RS) Rating improve. The score moved from 80 to 83 on Friday. This marks a significant upgrade for the company.

Understanding Relative Strength

Investor's Business Daily developed the RS Rating. It measures a stock's price performance. Scores range from 1 (worst) to 99 (best). This rating compares a stock's 52-week performance. It includes all other stocks in the database. Historically, top-performing stocks often show an RS Rating of at least 80. This usually happens before major price runs.

ROK's Recent Market Behavior

Rockwell Automation previously broke out. However, it later fell below its $308.69 entry point. This entry came from a cup-without-handle pattern. A stock tracking below 7% of its original entry price suggests a failed base. Therefore, investors should wait for a new base to form. Then, a new breakout would be ideal. Also, the latest pattern is a later-stage base. These bases often face higher failure rates.

Financial Performance

Recent earnings and sales growth showed decreases. Earnings fell by 2%, and sales by 6%. However, this marked two consecutive quarters of acceleration for EPS. The top line also accelerated for two quarters. This indicates a positive trend.

Industry Standing

Rockwell Automation ranks fifth in its industry group. The Electrical Power/Equipment industry includes many peers. Vertiv Holdings (VRT) currently holds the top spot.