Relative strength is an important tool we use every day in scanning for stocks and ETFs. Pattern relative strength, where we compare significant swings highs and lows in a stock or ETF against a broad market index like the S&P 500 is an easy way of identifying what is and isn’t strong. A good example of this is the recent price action in the iShares U.S. Home Construction ETF ($ITB), which just broke above the downtrend line on the weekly chart.

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