The Utes Powered Higher, and That's Good
In addition to the indicators, we've got a long list of your requests to examine. Charts include SCHW, RUN, MBLY, PALL, OLED, MELI, LITE, CLF, CIEN, FSLR, MA, LEVI, and XLU.
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The Market
The most interesting aspect of today’s market wasn’t any of the breadth statistics, although they were good—the best since before the election—it was that the Utes made a new high.
XLU, the Utilities Select Sector SPDR XLU, missed by a fraction, but the actual Dow Jones Utility Index did so (it still has an all-time high from early 2022 to contend with).
This is the chart of XLU, which is now up about seven percent since that low a few weeks ago. I will always consider Utes that go up a positive for the market.
But it’s more than the Utes. Earlier this week, I highlighted Proctor and Gamble as a bullish chart. A day or so later I asked you to notice that Colgate and Clorox and Kimberly Clark were moving as well. I missed the REITs but they too notched up. So basically all the stocks that typically move with lower rates–except the homies--have had a good week. It’s just the darn bonds that can’t get going!
Oh, I am sure I’m supposed to comment on MicroStrategy but I’d rather note once again that the DSI for Bitcoin (which was up today) was 88. You see how MSTR was taken apart? I would say you should be careful with BTC, too, with the DSI that high. Selling some seems like a smart move.
Anyway, we had good breadth today, with new highs increasing and new lows continuing their contraction. A pullback in the next day or so should lead to another rally next week.
New Ideas
I was asked about Levi Strauss LEVI a month or so ago. It broke the early August low but I find myself watching the support at 15-16 thinking this stock should be a ‘tax loss selling’ candidate. By that I mean it really ought to rally when the selling is done. The stock has almost halved from the high and is down over 30% in six weeks. It has to be oversold.
Today’s Indicator
The ten-day moving average of the put/call ratio is really low and today’s reading was .79, the lowest since early October.
Q&A/Reader’s Feedback
There are a lot of stocks to get to. If I didn’t get to your name/request today, it will be done on the weekend. Keep ‘em coming!
First Solar FSLR has some support here but there is no base to speak of. I liked it last summer in July/August as it was trying to bottom but the bottom gave way and now it needs to begin the process all over again. If it can hold this 170-180 area into year end perhaps there is a trade to be had with the new year.
Sunrun RUN has support here, but it is ephemeral. From a risk/reward standpoint it’s not bad because if it cracks under support, which is so close by, you know you’re wrong. But right now, I’d say just a trade.
abrdn Physical Palladium Shares ETF PALL has me intrigued. I wish it hadn’t had that false breakout in October but it has gone sideways for a long time, so I’d be inclined to nibble at it with the thought that 2025 brings a change out of the range to the upside. I would like to see it do some work down here over the next month.
Ciena CIEN hasn’t done anything wrong but it is not my type of chart because it is up so much and has no pattern to speak of. I’d say stay long with a stop under 65-ish.
Lumentum LITE is a stock I loved last year, must have showed that base at least dozen times (or more!) all summer. It has finally gotten in gear. There is a measured target right around here so I'd book some profits, but if it can get over 90, then the 90/100 rule kicks in (90% of the stocks that make it to 90 will make it to 100)
For the time being, Cleveland Cliffs CLF looks like it is in a trading range between 11 and 14. The base is not big enough for me to trust it can eat through that much resistance, but with the stock near 11, it’s a decent risk/reward for a trade to the upper end.
MercadoLibre MELI has left a lot of resistance overhead, but the whoosh down came to support and met a measured target. Maybe it can fill that gap overhead from early November.
Schwab SCHW has a measured target in the upper 80s. I’m just not good at chasing stocks that are up already but this has done nothing wrong yet.
Mastercard MA had a measured target in the 530 area, so while it hasn’t done anything wrong I would need a new pattern to set up for me to like the chart.
Universal Display OLED is at support, but boy does this chart have a history of waterfalling. Again, the risk/reward is pretty good because under 160 and you are dead wrong to own it down here.
I want to like the chart of Mobileye MBLY because it is trying to base, but right now, I think the best it can do is fill that gap near 20. And gosh if it came down to tag the lower line, I’d probably like it because it would help the base that is trying to develop.
