With the market acting like the Energizer bunny, MoneyShow’s Tom Aspray goes prospecting for stocks, which will provide good entry points for the next leg up.
As the public focuses on the recent strength of the Dow Industrials, the professionals are becoming concerned by the failure of the S&P 500 or Spyder Trust (SPY) to also make new highs.
Some may recall that in late January analysts were also concerned that the Dow Industrials had not confirmed the new highs in the Dow Transports. At the time, I was fairly confident that the strong technical readings suggested that the Industrials would also make new highs.
The new highs in the NYSE and S&P 500 Advance/Decline lines make it very likely that the Spyder Trust will also surpass its all-time high at $157.42 but it may not happen right away. European markets and the stock index futures are both lower ahead of the opening, and I am expecting more choppy trading over the coming weeks.
Since the February 25 lows, the Select Sector SPDR Financial (XLF) is up 6.3% versus a 4.5% gain in the Spyder Trust (SPY). The Select Sector SPDR Health Care (XLV) lagged slightly up just 4.3% but is still one of my favorite sectors. The Select Sector SPDR Energy (XLE) was up just a bit more than SPY but some of the oil stocks have the most compelling technical patterns.
These are the sectors where I am looking for new stocks to buy and these four stocks look ready to move higher in the coming months but it will require a slight pullback from last week’s highs to give us a good entry point.
Chart Analysis: BB&T Corporation (BBT) hit a high last September at $34.37 and then dropped back to a low of $26.86, which was just above the 50% Fibonacci support level from the 2011 lows.
- The correction from the February highs took BBT back its 20-week EMA before it closed strong last week.
- The weekly relative performance has dropped from the 2012 highs and now appears to be bottoming.
- The weekly OBV tested its WMA just a few weeks ago and has now broken through major resistance at line c and is leading prices higher.
- There is initial support in the $31 area with further at $30.60 and the quarterly pivot is at $30.21.
- It dropped slightly below the 50% retracement support and retested the major breakout level at line d.
- The weekly starc+ band is at $29.65 with the next upside targets in the $31-$32 area.
- The weekly relative performance shows a well-established uptrend, line f and has just moved back above its WMA.
- The daily, weekly and monthly OBV are all positive with the weekly OBV now close to breaking through resistance at line g.
- The OBV has good support now at line h.
- There in minor support now at $27.65-$28 with stronger at $26.70-$27.
- The quarterly pivot is now at $26.03.
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