From WSJ:
The number of stocks in the S&P 500 that hit 52-week highs on a daily basis has largely stayed in the 40-to-70 range during the index’s most recent record run, similar to last fall, when stocks hit records. That isn’t as strong as in the first half of 2017, when indexes hit record highs and were able to eclipse the 80 range. In early 2018, as major indexes pushed their records higher, the number of companies hitting 52-week highs was above 140.
Willie Delwiche, an investment strategist at Robert W. Baird who has been analyzing the rally’s breadth, said getting above 75 would be encouraging.
The amount of individual stocks setting 52-week highs has also lost some momentum in recent months, after indexes sprinted out of the gate in the first two months of the year and many individual stocks hit 52-week highs. When the S&P 500 surpassed its 2018 peak on April 23, fewer than one in 10 S&P 500 stocks made new 52-week highs, according to Baird.
Some investors say relatively lower breadth in the rally could be a sign of trouble for major U.S. stock averages, which came under pressure Monday amid renewed global trade tensions.
“If breadth starts to falter, that would be a red flag that the stock market is due for a pause or a pullback,” said Michael Sheldon, chief investment officer at RDM Financial Group at HighTower.
To be sure, 69% of companies in the S&P 500 were trading above their 200-day moving average on Friday, up from 9% when major averages hit their Christmas Eve 52-week lows, according to FactSet.
After a sharp run up in January and February, stocks have continued to grind higher in recent months, helped by the Federal Reserve’s patient tilt on monetary policy and better-than-feared corporate earnings.