Scalper1 News
The market has had a nice five-week run. So have oil prices. The S&P 500 on Tuesday traded as high as 13.6% above its Feb. 11 low of 1810.10 and back on positive ground for the year. West Texas Intermediate crude was 53% above its February low — its best move since a nine-month, 62% climb to near $115 a barrel in 2010-11. That combination had, on Tuesday, driven 10 industry groups to gains of more than 20% over the past four weeks. Three of those groups were oil-related: International Exploration and Production, U.S. E&P, and Field Services. But the biggest gains did not come from oil. At the top of the list, Metal Products-Distributors had hammered out a 45% gain over the past four weeks. The group is up 73% from a January low, although still 45% below its high mark set in April 2014. Olympic Steel ( ZEUS ) and Norway’s Norsk Hydro ( NHYDY ) are a few of the names that have been around for decades. The only stock in the group with a Composite Rating from IBD above 90 is the relatively newer Park-Ohio Holdings ( PKOH ), which trades a far-too-thin 51,000 shares a day. The next biggest gain — a 30% rise — comes from the automakers group. No surprise that the star here is Tesla Motors ( TSLA ). Tesla put in a 70% advance off its Feb. 9 low of 141.05, retaking support at both its 10- and 40-week moving averages. The stock’s chart is volatile and sloppy, but arguably is presenting a deep cup base with a 243.73 buy point. This setup comes just ahead of Tesla’s release of its mass market Model 3 , slated for late next week. India’s Tata Motors ( TTM ) is also below a cup-base buy point. But, while analysts expect Tesla’s EPS to rebound sharply this year and next, consensus views see Tata’s earnings losing ground again this year (down 44% to $1.97 a share) before a projected 199% rebound in 2017. Steel producers and specialty steel makers took two of the top five gains among industries. Big moves by specialty steel heavyweights Carpenter ( CRS ) and Allegheny ( ATI ) helped power the group’s 29% advance. But the fundamentals of both stocks have much work to do before making the leadership grade. On the strictly steel products side, Nucor ( NUE ) and Steel Dynamics ( STLD ) are basing. Both are still fundamentally weak, although Steel Dynamics’ EPS are forecast to rebound 78% this year and 29% in 2017. In the Building-Heavy Construction group, big-bore builders Fluor ( FLR ) and Aecom Technology ( ACM ) helped drive the advance. Thinly traded Granite Construction ( GVA ) broke out of a cup-with-handle base at 44.93 on Tuesday. Analyst consensus projects that the road and highway builder’s EPS will jump 31% this year and 35% in 2017. Metal ore miners swept up 23% in the past four weeks. A sharp rebound in iron ore prices, sparked by pledges of reduction in China’s steel industry production, fueled advances by both large and small players in the group. But few in the industry see conditions truly improving until late this year, or early in 2017. Scalper1 News
Scalper1 News