Burlington Stock Climbs. Quality Clothing Discounter Rebounds.

Burlington stock hits an 80-plus Relative Strength Rating, a good sign for investors.

Burlington Stores BURL, the 51 year old discount chain famous for its high-quality coats and garments may have reached a turning point. After several quarters of declining growth in earnings, it posted a 17% increase last quarter. Burlington's stock also received an upgrade to its Relative Strength Rating (RS) on Thursday, which rose from 77 up to 83. This is a bullish indicator.

Burlington's RS rating of 83 shows that it has performed better than 83% of other stocks in the last 12 months. The best stocks are those that have an RS rating over 80 at the beginning of their movement. Burlington has now joined the elite group of stocks that are worth buying and watching. The rating upgrade is not without caveats.

Burlington's other ratings must improve for the stock to move from a watchlist candidate to a buy candidate. Its Earnings per Share rating is 35, which is largely due to the decline in earnings that preceded the latest quarter. Its Composite Rating of 68 is higher than its Earnings Per Share Rating, but it still needs to improve.

The number of funds that hold Burlington stock rose from 1,169 to 1,207 between September and March.

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Burlington's stock fell to an intraday low of 106.47 on September 30. Since then, it's risen by 82% to near 194 on Thursday afternoon.

Burlington was profitable in every quarter of the last year. However, its profits have been declining until the latest quarter. Last quarter's earnings grew by 17% to $2.96 a share. This is a turnaround from the 68% drop in the previous quarter. Last quarter's revenue rose by 5%, to $2.74billion. This compares with a 11% decline in the previous period. Burlington will report its latest results around or on May 25.

TJX Cos. and Ross Stores are two of the highest-rated stocks in this group.

IBD's RS Rating is a unique way to measure technical performance. It compares a stock’s price movement over the past 52 weeks with other stocks in the major indexes.

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