Shopping For Bargains:
2019 has been an extraordinary year as all of the major S&P sectors are in the green, and the top 8 are all higher by double digits. The XLY has advanced nearly 12%, and we are not even 2 months into the year (and that is with top component AMZN still in bear market mode down 21% from most recent 52 week highs). Some former leaders are holding recent earnings gaps very nicely, including CMG, COLM, DECK and VFC. The chart below of YETI was another example, but todays bearish engulfing candle warrants caution. WMT is an exception, as it followed through to the downside Wednesday after yesterdays bearish shooting star candle.
These Names Not Sleepy/Lazy At All:
The S&P 500 has not behaved drowsy at all in the last couple months, but its behavior has been outshined by some of the homebuilder periphery plays. Below shows the action in the stocks of LZB, TPX and SNBR compared to the index. Each of the three aforementioned names have recorded breakouts, and more importantly have acted well POST breakout. They are all up between 30-41% in 2019 thus far already. Those returns are nothing to sleep on.
Some of the homebuilding related sub sectors have been acting very well. The XHB now sits just 10% off most recent 52 week highs, and has jumped 10% the last 3 weeks alone after a break above a 3 week tight period. The 3 weeks ending between 1/11-25 all CLOSED within just .17 of each other. Below is the chart of a beneficiary of that move, MLHR and how it appeared in our 2/11 Consumer Report. Last week it demonstrated excellent relative strength gaining 6.2% and look to add to this name above a WEEKLY double bottom pivot of 40.75.