Material names are beginning to show bullish signs and perhaps are going to be big beneficiaries of a stronger economy going forward. The XLB is looking very solid, pun intended, as the ETF is looking for its third weekly gain in a row higher by .2% headed into Thursday. A peek on its weekly chart displays a nice, long weekly cup with handle pattern setting up with a buy point above 51.79 in a base that started way back the week ending 2/27/15, obviously almost 2 years old. Remember the longer the base, often the better the chances of success once the breakout occurs. Below is the chart of a former best of breed name attempting to recapture its glory. It is shown exactly how it was presented in our Monday 12/19 Game Plan.
Stocks that can be bought at the bottom of bullish falling wedges are VMC. VMC is a materials play higher by 30% YTD and 31% over last one year period and sports a small dividend yield of .6%. Earnings momentum is a bit soft with back to back losses of 2.6 and 6.2% on 11/2 and 8/1 after gains of 4.3 and 6.5% on 5/3 and 2/4. The stock is lower 3 of the last 5 weeks and this one underperformed down by 3.9%. It does look like a healthy digestion recently of the 5 week winning streak ending between 10/14-11/11 which advanced by a combined 24%. VMC is now approaching the the lower support line in a bullish falling wedge and enter at 122.50. That also is nearing a rising 50 day SMA and filling in a gap from the 11/1 session.