Two Long Ideas: Nutrien: Agricultural inputs play up 27% YTD and 8% over last one year period. Dividend yield of 3.8%. Name 6% off most recent 52-week highs and MONTHLY chart shows first bullish MACD crossover in more than 4 years. Double bottom base taking shape (79.40 trigger) and look for May to record first CLOSE above 50 MONTH SMA since September 2o23. Enter on pullback into double bottom breakout. Entry NTR.TO 77. Stop 73.
"Depositing" Gains? Unless one has been living under a rock since the start of 2025 they would know the defensive stance the market has taken. As of Wednesday's CLOSE, the best-performing major S&P sectors were utilities, staples, healthcare, and real estate, followed by the financials. Not endearing to growth investors, who are looking for some reversion to the mean from tech and discretionary which make up the cellar. The daily chart below of the XLF shows it taking baby steps toward potential leadership with a reversal off the 21-day EMA and 200-day SMA. A break above 49 would put an end to lower highs in 2025 and put a double bottom pivot of 51.01. It is also no secret that domestic banks have been underperforming international with the ratio chart against Europe via the EUFN showing a stiff downtrend since last December. Perhaps US banks are ready to start showing some strength against their European counterparts with the bullish hammer candle on the MONTHLY ratio chart and with some more follow through will carve out a double bottom base. Everyone likes to cite JPM and GS which are of course important, but BRK/B is still the top holding in the XLF at 14%, and April recorded a bearish hanging man candle.
Flying at High Altitude: Boeing may not command the relevance in the PRICE-weighted Dow as it once did when it traded above 400 in February-March 2019, but it is certainly making its presence felt as of late. It is still a top 5 holding in the XLI which is hitting some resistance in the 130 area at a downward-sloping 50-day SMA after a bearish death cross (notice the back-to-back spinning top candles last Friday and Monday which speak to fatigue after the 17 handle run off 4/7 the lows). Below is the daily chart of BA and it has enjoyed a rapid rise and is it too easy to think that this move into the 180-185 area for the sixth time in 6 months will fail? Of course, no one knows the answer to that question but a CLOSE above the 184.50 would be a good start. A 55-point move off the early April lows is a lot and some consolidation up here may be in order but on the WEEKLY chart bulls would love to see a pop above the 200 WEEK SMA where it has been rejected four times (notice since the election it has acted well against XLI peers on the ratio chart). The MONTHLY chart is forming a bullish hammer candle and the last 2 times it touched near the 125 level on a CLOSING basis back in 2020 and 2020 it eventually rallied to well over 250.
Technical Sector Breakout List Growing: Technology has been making amends and it is just the group market participants would like to see take the baton in this nascent rally. Measured by the XLK, technology is still just the tenth best-performing major S&P sector YTD, outperforming just consumer discretionary with each down in the neighborhood 10% so far. We have mentioned the growing tech double bottom breakouts from PLTR CRWD and NFLX, and it is now refreshing to add some consumer names are following their lead. For example, EAT a best-of-breed casual diner, is just above a 158.45 double bottom trigger, and is stalling somewhat and had been above the pivot intraday the last 3 sessions before CLOSING north of it Monday (this is a name that demonstrated solid relative strength not even coming close to touching its 200 day SMA in the recent market frailty). The daily chart below of CVNA, which REPORTS next week, is just above a double bottom trigger and would like to see this push stronger away from it with the shooting star candle last Friday. On the MONTHLY chart it is carving out a very deep cup with handle base and bulls or bears can paint their bias with the former saying April is a bullish hammer, and bears a hanging man.
Nasdaq Thrust: Many like to proclaim a true rally can not occur without the financials. I would say technology is more important and the MONTHLY chart below of the Nasdaq shows the infrequent contact with the 50 MONTH SMA. It was nearly precise in touching the secular line and was a 50% retracement from the run from the very round 10000 to 20000 from October 2022 to last December. Where is its near-term likely path from here? The WEEKLY timeframe has a nice look to it, with a bullish piercing line and engulfing candle during the weeks ending 4/11 and 4/25, both rising by 7% (those were both the best returns since the week ending 11/11/22 that rose by 8.1%). Both CLOSED in the upper half of the WEEKLY range and it now has a path to the 50 WEEK SMA which is just above the 18000 figure. In hindsight, the rare contact with the oversold 30 RSI number was an excellent signal. Notice on the DAILY chart the third time was the charm in breaking above the bear flag breakdown, which did meet its measured move lower of roughly 2500 handles. My feeling is this still has another 1000 handle run, on the daily timeframe that will be near the declining 200-day SMA. If and when that occurs we can reassess from there.