ASX Stocks Showing Strength: How to Navigate a Sideways Market While US Indices Surge
- Christopher Hall
- 4 hours ago
- 16 min read
Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | Updated May 2026 Analysis sourced from Gary Glover (AR 259215), Authorised Representative, Novus Capital Limited (AFSL 238 168)
ASX stocks showing strength right now are the exception, not the rule — and identifying them requires applying a single consistent filter before any setup earns a place on a momentum trader's watchlist: an initial rally off the price low, confirming that new buyers have entered the stock, must have occurred before any consolidation pattern is worth targeting. Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), who reviews ASX momentum stocks in a recorded weekly session with Finer Market Points, applied this filter directly on 12 May 2026, against a backdrop in which the S&P 500 was approaching a significant three-timeframe convergence zone at 7,460–7,490 while the ASX 200 had traded sideways for four consecutive weeks. This article covers Gary's multi-timeframe expansion range methodology for reading global indices, the structural factors behind the US-ASX divergence, and his sign-of-strength filter applied stock by stock across ASX growth, retail, and construction sectors.
Why Is the ASX Moving Sideways While US Markets Surge Higher?
The US-ASX divergence in May 2026 is structural, not cyclical — driven by sector composition differences, domestic fiscal headwinds, and the concentrated nature of the NASDAQ's AI-driven advance.
Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), who reviews ASX momentum stocks in a recorded weekly session with Finer Market Points, identified three distinct contributing factors during the 12 May 2026 session. This is a practitioner observation, not a formal study.
The first factor is sector composition. The NASDAQ's advance is driven by AI and semiconductor stocks — a concentration the ASX, with its heavy weighting toward resources and financial companies, does not replicate. When capital flows into a narrow group of US technology names, the effect on the NASDAQ is significant. The ASX does not have the sector composition to participate in that specific move. The ASX 200 market structure versus US index comparison makes this divergence visible in price and constituent terms.
The second factor is domestic fiscal policy. Gary Glover's anecdotal practitioner assessment is that the current Australian fiscal policy environment has suppressed the ASX's ability to capitalise on the commodity bull market. His observation, developed across his trading career, is that the government's fiscal posture has worked against economic expansion rather than accelerating it. The framework for that assessment is Gary's practitioner-level reading of how fiscal cycles interact with index performance — and it informs why the midterm year market cycle playbook, while useful in a US context, does not translate directly to the current ASX environment.
The third factor is what Gary described as a "bizarre" disconnect: a broadly bullish global commodity environment in which the ASX — heavily weighted toward resources — has been unable to break to new highs. The commodity bull case should theoretically benefit the ASX disproportionately. That it has not done so reflects the depth of the domestic headwinds Gary identifies.
In price terms, the XJO has been range-bound between key expansion levels of approximately 150 and 166 for four consecutive weeks. The NASDAQ, by contrast, has cleared successive resistance at 175, 275, 375, 475, 575, and 625 — each level taken, each advance continuing. The S&P 500 is approaching a three-timeframe convergence zone at 7,460–7,490; the Dow Jones has consolidated beneath 50,000 for three to four weeks. Understanding the structural basis for this divergence matters because it frames the task: the question is not when the ASX will follow US markets higher. The question is which ASX stocks are already exhibiting the strength characteristics that precede a Stage 2 advance — regardless of what the broader index is doing. Gary's analysis of vertical trend and sector rotation begins at the index level and then moves to individual stock selection, and the index-level picture currently argues for selective positioning rather than broad exposure.
How Does Gary Glover's Multi-Timeframe Expansion Range Analysis Work?
Gary Glover's anecdotal practitioner observation, developed across his trading career, is that expanding historical correction ranges across daily, weekly, and monthly timeframes simultaneously produces a reliable map of where major index resistance will appear — with convergence across all three timeframes marking the most significant zones.
The method works as follows. Take the largest historical correction for an index — for the NASDAQ, the technology sector correction of 2000–2002. Expand those correction ranges forward in equal increments to project future resistance levels. Repeat the process using the largest weekly correction and the largest daily correction independently. Where daily, weekly, and monthly expansion ranges all converge within a narrow zone, the resistance signal carries substantially more weight than any single-timeframe level.
Think of it like sonar readings taken at different depths: each reading covers the same structure from a different angle. When three separate readings all return the same obstacle at the same location, the signal becomes definitive rather than directional.
For the NASDAQ, Gary's expansion analysis has produced resistance at 175, 275, 375, 475, 575, and 625 — each a full-range increment from the original correction. The market has found resistance at every level and ultimately broken through each. The current level is 625; the next projected level is 675. For the S&P 500, Gary identified a triple convergence of daily, weekly, and monthly expansion ranges within approximately 20 points of each other at 7,460–7,490 — a zone Gary described as one that "needs to be watched very carefully." The Dow Jones has consolidated beneath 50,000 for three to four weeks, another expansion-derived resistance level that has absorbed buying pressure.
The current NASDAQ trajectory sits within what Gary Glover, drawing on the methodology of his mentor Bill McLaren, describes as a blowoff trend — a phase where accelerating trend lines gain vertical momentum, typically preceding an eventual exhaustion. Gary's anecdotal practitioner knowledge is that the average power trend runs approximately 77 days before breaking the 21-day moving average. The last comparable trend leg — in 1999 — ran approximately five and a half months before concluding. At 45 days from the recent low as of the 12 May 2026 session, Gary's assessment is that the trend "still looks too young" to be approaching its natural conclusion. The conditions that define the IBD Power Trend support this view — the NASDAQ is not yet displaying the technical deterioration that precedes power trend breaks. The behaviour of accelerating trend lines in the final stage of a vertical move is a separate but related analysis Gary applies alongside the expansion range framework.
What Separates ASX Stocks Showing Genuine Strength from Those Still Building a Base?
The distinction between an ASX stock showing genuine strength and one still building a Stage 1 base is not a matter of interpretation — it is the presence or absence of an initial rally off the low before any consolidation pattern begins.
Gary Glover applies a single consistent filter across every stock and sector he analyses: before committing capital to any ASX consolidation setup, a sign of strength — an initial rally off the price low — must have already occurred. This is a practitioner observation, not a formal study. The rally is the first evidence that new, committed buyers have entered the stock. Without it, all subsequent price action plays out against a shareholder register still populated by sellers who are waiting for a chance to exit.
To understand why this matters, Stan Weinstein's framework for stock market phases is essential. In Secrets for Profiting in Bull and Bear Markets (1988), Weinstein defines Stage 1 — the basing area — as the period that follows a sustained decline: "The stock has stopped going down. It starts moving in a relatively narrow sideways range. The 30-week moving average, which had been falling for months, begins to flatten out... There is no consistent buying pressure yet, and volume is unimpressive." Stage 1 is the accumulation phase — the period in which weak hands (shareholders who entered at higher prices and are relieved to exit near break-even) are gradually replaced by strong hands: committed holders who understand what the company's next phase looks like and are positioned for it. This transition typically runs 5–8 months on the ASX, though the full range spans 3 months to 3 years. The base takes as long as it takes. Nothing accelerates the process.
The sign of strength — the initial rally off the low — is the first evidence that Stage 1 is concluding and that the shareholder base has shifted. Once that rally has appeared and the stock enters sideways consolidation, Gary targets a tightening Volatility Contraction Pattern (VCP) — a consolidation where each successive pullback tightens progressively, signalling that supply is exhausting before a potential breakout. William O'Neil documented the statistical case in How to Make Money in Stocks (2009): "The greatest winning stocks of the past century all formed sound base patterns before their major advances began — consolidation periods that allowed the stock to reset and build the power for the breakout ahead." O'Neil's quantitative analysis of 3,000+ of the greatest stock market winners from 1880 to the present, as documented in How to Make Money in Stocks (2009) and further detailed in IBD and MarketSmith coaching materials, found that 90.77% broke out from sound bases during confirmed Stage 2 uptrends. Without the Stage 1 completion and the sign of strength, a stock has not earned its position on a momentum trading watchlist. The Momentum Profile filter and relative strength as a leading indicator both reinforce this sequencing — the sign of strength precedes everything.
On the ASX in May 2026, the filter produces a clear contrast. CAR Group (ASX:CAR) has produced an initial rally off its recent low and is now consolidating sideways — one of the stronger current ASX growth setups. Catapult Group (ASX:CAT) has no sign of strength; volume has dried up entirely; and Gary's anecdotal review of Catapult's prior price history shows that approximately 50% of its previous base formations historically lacked an initial sign of strength before eventually breaking out — an anomaly Gary acknowledges, but does not act on. Waiting for the sign of strength is the discipline, not the exception.
The FMP Momentum Profile — published daily and accessible to FMP YouTube Momentum Profile members — included relative strength data across ASX growth and technology names at the time of the 12 May 2026 session, giving members early access to the educational data discussed in this article.
Which ASX Growth Stocks Are Showing Relative Strength Right Now?
Among ASX growth stocks, the absence of a sign of strength — not valuation, not earnings quality — is the primary reason Gary Glover is positioned lightly across the cohort.
Gary noted during the 12 May 2026 session that his approach for current ASX growth and technology names is to "go very lightly" until strength is confirmed. Technology One (ASX:TNE) and REA Group (ASX:REA) emerged from the recent low more decisively than peers — both broke out of descending channels — but remain choppy and have not settled into the clean consolidation Gary waits for. Promedicus (ASX:PME) and WiseTech Global (ASX:WTC) are making higher lows and doing what Gary described as "constructive work" within their ranges. Constructive, in Gary's practitioner assessment, is not the same as actionable. It is the category of "watch but do not act."
CAR Group (ASX:CAR) is the exception among the growth cohort. The stock bounced from its recent low and then settled into sideways consolidation — the specific sequence Gary waits for before targeting any setup. This is consistent with Gary's 3-signal accumulation framework for identifying ASX growth stocks in the early phase of a Stage 2 advance: the sign of strength appears, the consolidation begins, and the setup becomes targetable. For Gary Glover, CAR Group's current price action earns a watchlist position — not an immediate entry trigger, but confirmation that the prerequisite work has been done.
Catapult Group (ASX:CAT) remains in a base with no sign of strength. Volume has dried up, and the company reports earnings on 20 May 2026 — a catalyst that introduces binary risk before any technical confirmation exists. Gary's anecdotal review of Catapult's prior price history shows that approximately 50% of its previous base formations lacked an initial sign of strength before eventually breaking out — but Gary Glover's watchlist approach is to require confirmation regardless of historical base anomalies.
The Life360 (ASX:360) situation illustrates a separate and important risk. Life360 reported approximately 30% year-on-year revenue growth and the stock sold off following the announcement. Life360's accelerating trend line pattern had extended to a level where market expectations were priced well ahead of reported reality, leaving no room for error regardless of result quality. The lesson Gary draws: elevated market expectations create post-result risk, and momentum traders must account for that risk in position sizing ahead of earnings for any stock that has already made a large move.
Remember that past performance is no guarantee of future results, and all trading involves risk.
Which ASX Sectors Are at a Valuation Inflection Point — and What Would Trigger a Move?
Australian retail and construction stocks are at valuation multiples that Gary Glover's practitioner experience associates with sector inflection points — but momentum traders require a catalyst and a confirmed sign of strength before capital is committed, regardless of how compelling the valuation appears.
Gary's anecdotal observation, developed across his trading career, is that when an entire sector reaches historically suppressed multiples and market sentiment has turned uniformly bearish, the negative scenario is likely already priced in. His framing: "everyone's already sold." The next price-moving event is not more selling — it is a catalyst that reframes the narrative. Gary's practitioner experience associates this environment with eventual private equity interest: when whole sectors trade at deeply depressed multiples, industry consolidation becomes economically rational, and restructuring can rerate the sector rapidly.
During the 12 May 2026 session, Gary Glover noted that Paul Tudor Jones had observed in a recent interview that capital tends to rotate from one asset class to another as new supply draws away available growth investment — citing AI IPOs as the current mechanism absorbing capital that might otherwise find its way into Australian retail and consumer discretionary names. That capital rotation dynamic helps explain why relative strength in unexpected ASX sectors has sometimes emerged in areas far removed from the dominant growth technology cohort.
Super Retail Group (ASX:SUL) provides the clearest valuation case in the retail sector. The stock declined from approximately $20 to approximately $10 per share over approximately 12 months — a fall of roughly 50%. At the time of the 12 May 2026 session, Gary placed Super Retail Group's market capitalisation at approximately $2.9 billion against approximately $12.5 billion in annual revenue — a market cap to revenue ratio Gary described as in the range of stocks trading at "ridiculously cheap" multiples. Adairs (ASX:ADH) was sitting at an even lower revenue multiple.
Remember that past performance is no guarantee of future results, and all trading involves risk.
These valuations are the conditions Gary associates with eventual sector re-ratings. They are not immediate entry triggers. Reece Group (ASX:REH) is the construction name Gary identified as most interesting. The stock has tightened up in price action and is sitting above a prior high at approximately $12. Gary's anecdotal assessment is that the federal government's housing affordability focus creates a medium-term catalyst case for construction and building materials names. But Reece Group has not yet produced the sign of strength needed to act on that thesis. Gary Glover's approach to sector discipline is explicit: a compelling valuation and a plausible catalyst are background conditions, not entry criteria. The sign of strength remains the entry criteria — in retail, construction, and every other sector Gary analyses.
Conclusion
The central task for ASX momentum traders navigating the current environment is applying Gary Glover's sign-of-strength filter with consistency while the macro divergence persists. Three takeaways from the 12 May 2026 session stand out. First, the US-ASX divergence is structural: the NASDAQ's power trend — 45 days old and driven by AI and semiconductor stocks — is young and strong, while the ASX lacks the sector composition and domestic fiscal conditions to replicate that move. Second, the sign-of-strength filter is non-negotiable across all sectors: among the names Gary analysed, only CAR Group (ASX:CAR) passes the current test — most ASX growth, retail, and construction names remain in Stage 1 and require patience. Third, retail and construction valuations are genuinely compelling — Super Retail Group, Adairs, and Reece Group are all on Gary's radar — but momentum traders require both a confirmed catalyst and a confirmed sign of strength before capital deserves to move. The supporting Momentum Profile data from the 12 May 2026 session is accessible to FMP YouTube Momentum Profile members. Watch whether Reece Group produces a sign of strength above the ~$12 prior high, whether inflation or geopolitical data shifts the retail narrative, and whether the NASDAQ extends through 675 or begins showing the first signs of power trend exhaustion at 625.
The analysis in this article draws on Gary Glover's recorded session of 12 May 2026 and the FMP educational framework published by Finer Market Points. The FMP Momentum Profile is published daily and accessible to FMP YouTube Momentum Profile members, who receive early access to the educational data that forms the basis of articles like this one. The full Gary Glover session recording from 12 May 2026 is also available to members. For information on FMP YouTube Momentum Profile membership, visit the FMP YouTube Momentum Profile membership page.
About the Author
Christopher Hall (AdvDipFP) is an Authorised Representative of AFSL 526688 and a writer for Finer Market Points, Australia's momentum trading education resource for ASX investors. Christopher covers ASX momentum stocks, VCP patterns, sector rotation, and the Gary Glover weekly session analysis.
Frequently Asked Questions
What does "sign of strength" mean in ASX momentum trading?
A sign of strength is the initial rally off a price low that confirms new buying interest has entered a stock. Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), applies this filter consistently: before targeting any consolidation pattern on an ASX stock, an initial rally must have occurred first. Without it, the stock may still be completing a Stage 1 base — a phase that can extend for months without producing a tradeable move. The sign of strength is the entry confirmation, not the base itself.
How does Gary Glover's multi-timeframe expansion range analysis work?
Gary Glover's anecdotal practitioner methodology takes the largest historical correction for an index — such as the NASDAQ technology sector correction — and expands those ranges forward in equal increments to project future resistance levels. The process is then repeated at the weekly and daily timeframes independently. Where all three timeframes converge within a narrow zone, the resistance carries the most weight. Gary has refined this methodology over approximately the last 12 months and notes it consistently identifies key turning points across the NASDAQ, S&P 500, and Dow Jones.
What is the difference between a stock building a Stage 1 base and one showing genuine strength?
A Stage 1 base — as defined by Stan Weinstein in Secrets for Profiting in Bull and Bear Markets (1988) — is the stabilisation phase following a sustained price decline. Characterised by lower volatility than the falling phase and a transition from regretful sellers to committed long-term holders, Stage 1 typically runs 5–8 months (range: 3 months to 3 years). A stock showing genuine strength has produced an initial rally off the low — the sign of strength — before entering any consolidation. That prior rally is the critical differentiator Gary Glover applies to every stock he analyses.
Why is the ASX underperforming US markets in 2026?
Gary Glover identified three contributing factors during the 12 May 2026 session. First, the NASDAQ rally is driven narrowly by AI and chip stocks — a sector concentration the ASX does not replicate. Second, Gary's anecdotal practitioner assessment is that the current Australian fiscal policy environment has suppressed economic growth rather than stimulating it. Third, despite a broadly bullish global commodity environment — an area where the ASX is heavily weighted — the index has been unable to break to new highs, remaining range-bound between key expansion levels of approximately 150 and 166 on the XJO.
How long does a Stage 1 base typically last before a stock is ready to trade?
Stage 1 bases — the accumulation and stabilisation phase described by Stan Weinstein — typically run 5–8 months on the ASX, though the full range spans 3 months to 3 years. Gary Glover's practitioner observation is that many ASX growth stocks are currently building bases following the 2025 selloff, and most are not yet at the sign-of-strength stage. The key signal that a base is completing is an initial rally on improving volume, marking the transition from Stage 1 accumulation toward the early phase of a Stage 2 uptrend.
Which ASX sectors are showing the most potential as a value catalyst emerges?
Gary Glover identified two sectors worth monitoring in the 12 May 2026 session. Australian retail stocks — including Super Retail Group (ASX:SUL) and Adairs (ASX:ADH) — are trading at historically suppressed valuation multiples, with some at a fraction of annual revenue. Construction and building materials names, including Reece Group (ASX:REH), may benefit from the federal budget's housing affordability focus. Gary's position on both sectors: valuations are compelling, but momentum traders need a confirmed catalyst and a confirmed sign of strength before committing capital.
What indicators should ASX momentum traders monitor to confirm a genuine breakout?
Gary Glover's 12 May 2026 session identifies three sequential confirmation signals for an ASX breakout: first, an initial sign of strength — a rally off the low — must precede any consolidation pattern; second, volume should dry up significantly during the consolidation phase, indicating exhaustion of selling pressure; third, a breakout through the consolidation high on expanding volume confirms institutional participation. These signals align with William O'Neil's quantitative analysis of 3,000+ of the greatest stock market winners from 1880 to the present, as documented in How to Make Money in Stocks (2009) and further detailed in IBD and MarketSmith coaching materials, which found that 90.77% broke out from sound bases during Stage 2 uptrends.
Disclaimers
Gary Source Disclaimer
This article is based on analysis and commentary provided by Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), during a recorded market analysis session on 12 May 2026. Content has been edited and summarised by Finer Market Points for educational purposes. Gary Glover has not independently reviewed or endorsed this publication.
FMP Educational Disclaimer
This content is for educational purposes only and does not constitute financial advice. Past performance is no guarantee of future results.
The information, opinions and other materials appearing on this website are of a general nature only and shall not be construed as advice. Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. This is not taxation advice. Rose Bay Equities accepts no responsibility for the accuracy or completeness of the information, opinions or other materials provided on or accessible through this website. This website has not been prepared with reference to your individual financial or personal circumstances. You should not rely on any advice on this website without first seeking appropriate professional, financial and legal advice. Further, where Rose Bay Equities makes third party material available or accessible through this website you acknowledge that Rose Bay Equities is a distributor and not a publisher of that content and that its editorial control is limited to the selection of those materials to make available. We accept no liability for any loss or damages arising from use.
Bibliography
Primary Sources: Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168) — recorded weekly session with Finer Market Points, 12 May 2026. All Gary Glover observations in this article are anecdotal practitioner observations developed across his trading career — not formal studies.
Books:
William O'Neil, How to Make Money in Stocks (McGraw-Hill, 2009)
Stan Weinstein, Secrets for Profiting in Bull and Bear Markets (McGraw-Hill, 1988)
Academic Research: None in this session.
External Research: None confirmed. Paul Tudor Jones interview reference cited through Gary's commentary only — no direct external source identified.
Related Finer Market Points Educational Resources (Christopher Hall, author):
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