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Materials

Materials at multi-level supportMaterials sector has been showing relative strength. It is actually 3th in YTD performance, after 1. Technology, 2. Discretionary (Mega-cap lead sectors) Today it is resting on the 100ema, which has been supportive since march 23rd crash. This level is also coinciding with early 2020's high, as well as 4 other tests of the support; including a failed breakout, which worked the next time it tried. OBV has been supportive of the uptrend. (BULL) RSI showing slight divergence as the last bottom late September has a slightly higher RSI(10) than the current one. (BEAR) A strong close below $60 would deny the support, and make the chart a short-term bearish one.
AMEX:XLBLong
by dorfmanmaster
MTL WW on openWith the rumor of a $1 Trillion US infrastructure bill to help put Americans back to work and revitalize the US economy, I believe we will see a lot of money getting poured into materials. "MTL engages in mining, steel, and power businesses in Russia, Asia, Europe, the Commonwealth of Independent States, the Middle East, the United States, and internationally. Its Mining segment produces and sells coking, metallurgical, and steam coal; coke; chemical products, including coal tar, coal benzene, and other compounds; and iron ore and iron ore concentrates. The company's Steel segment produces and sells semi-finished steel products, long steel products, and carbon and stainless flat products; ferrosilicon products; and pig iron, as well as metal products, including wire products, stampings and forgings, structural shapes, beams, and rails. Its Power segment generates and supplies electricity, heat energy, and other power resources to third parties." Will be watching this at open for a break of $2 and confirmation of new support. Will get in as close to $2 as I can after support confirmation. Stop at $1.72 PT1 $2.23 PT2 $2.77 PT3 $3.00 I plan to scale out at these 3 price points and scale in on the dips.
M
by Crispier-Bacon
Is Dow Overbought After Bouncing to its 50-day SMA?Materials companies are some of the most economically sensitive names in the market. Events like social lockdowns, mass job losses and nosediving GDP have all kinds of knock-on effects for their business. The sector was already struggling before coronavirus, and fell even more sharply as the disease spread. Dow Inc. is one of the most actively traded names in the space, and is also the only Dow Jones Industrial Average member. It bounced hard last week as the S&P 500 had its biggest weekly gain since 1974. But that rally has brought DOW back to its 50-day moving average and the high-volume bearish gap from March 9. Stochastics are also suggesting an overbought condition. Even if the worst of coronavirus has passed, this is a significant bounce for DOW and an area where traders may look to take profits. Based on the technicals alone, a retest of $31, or even $27, may be in the cards for DOW.
NYSE:DOWShort
by TradeStation
US Steel could pop on USMCA newsNews of the pending approval of the USMCA trade deal has been somewhat eclipsed by news of the signing of the Phase 1 China trade deal. However, the reality is that the USMCA deal has larger implications than the China deal, since we do a lot more trade with Canda and Mexico than with China. One sector affected by the deal is the U.S. steel industry, because the deal closes loopholes that foreign steelmakers have used to bypass steel tariffs when selling to U.S. manufacturers. That could give steelmaker stocks like X and AKS a nice bump when the media breaks the news of the deal passing in the Senate. However, any bump in steel stocks may be short-term, because the loophole closure is scheduled to take 7 years to go into effect. So I suggest treating this as a quick scalp play, at least until the U.S. manufacturing sector starts to recover.
NYSE:XLong
by ChristopherCarrollSmith
2
Cleveland Cliffs is an inexpensive trade deal recovery playCleveland Cliffs is a mining company with a lot of exposure to China tariffs. The company's earnings took a huge hit this year due to the downturn in steel as a result of the trade war, and the price plummeted. The company should get a nice surge on any positive trade talk news. It briefly made a bullish trend line break Friday when the market thought a deal had been made to repeal tariffs, but it's back down today after Trump said he loves the tariffs and he hasn't agreed to repeal them. (Sometimes I think he's jerking us around on purpose.) Even without a trade deal, this stock is a good bargain at the current price. It's got a sustainable 3% dividend and is financially healthy enough to weather the downturn. It did well on its last earnings report and has unusually bullish options activity. Backward P/E is now about 2.6, whereas before the trade war this traded at more like 10-15. Forward P/E is higher at 6.5, but still well below the 5-year average. Buy this for the dividend and hold it for the recovery whenever our political leaders get their act together on trade.
NYSE:CLFLong
by ChristopherCarrollSmith
3
Oil Inventories as a Catalyst for Breaking ResistanceEvent driven volatility is nothing new in commodity trading. Position traders thrive off post-announcement drift action, and while Wall Street continues to supply them with their needed dose of earnings reports, we shouldn't neglect the weekly available economic indicators that grant us so many setups for great trades. United States crude oil inventories are published on a weekly basis by the Energy Information Administration. The level of inventories greatly influences the price of all petroleum products, which in turn affect other foreign exchange assets. If you're not using U.S. Crude Oil inventories in your energy strategies - are you really trading oil then or are you just gambling ? In the chart you can see just what a catalyst these reports have been in the past. However, we can't attribute all price action to these reports alone; supply is only one part of the equation, and demand we gauge by the daily and hourly news updates that we form from whatever is thrown at us. In this case we have a very interesting set-up. From the technical perspective we see that since 18/07 oil couldn't find a new bottom, and gently started making higher-lows - ultimately dropping back down to its $56 support. There is no obvious sign that oil should continue it's descent to winter '18 levels, nor do fundamentals suggest anything close. In fact if we look at the relative volatility index (a volatility proxy similar in design to RSI), we can see that volatility has been mostly flat for the last two weeks, with little indicating further devaluation - but an assurance for a potential take breakout attempt is evident in the compression of the last 10 candles. On a fundamental level we're looking at quite a few catalysts that could potentially mint some gains on a long position. The ECB is considering rate cuts that could bring stimulus to a stifling European economy. The Fed has been in discussion of rate cuts for weeks. Global rate cuts could provide a nice monetary stimulus and support global trade. These looser conditions translate into bullish prospects for oil - mostly as a result of the actions of the Fed. With crude denominated in dollars, a rate cut with effectively weaken the dollar (rate cut = smaller cost of borrowing = dollar is cheaper), thereby making the asset far more available to global buyers. At the same time we have several political developments that greatly affect the global supply of oil. Tension in the Strait of Hormuz have still failed to deescalate. Further rising tensions, or a - not unforeseeable, but unlikely - blockade of the narrow shipping lane, could point to further gains. As a result Saudi Arabia and Kuwait have already expressed a sense of urgency in regulating this supply by exploring resuming oil production within the Saudi-Iraqi neutral zone. Overall; we see a potential for upside on technical level, with weekly inventories presenting great opportunity for volume driven growth, however traders should be cautious in evaluating fundamentals as multiple stakeholders aim to secure their own interests in the face of political instability. This weekend may present further information that would affect energy futures come Monday. Morpher presents a trading solution that allows users to trade in after-hours and pre-market - including weekends. Check out more information about Morpher on our profile. Useful further reading: Oilprice.com Reuters
NYMEX:CL1!Long
by morpher
2
EPISODE 6/11: US MATERIALS- WAVE 5 RANGE+CYCLE ANALYSIS (XLB TA)Episode 6/11: US (SPX) Sectors Technical Analysis Series - 17th of July 2019 Brief Explanation of the chart : Wave Extension 1.618 target reached 64.34 (based on length of drop from 2009). Sin lines represent the stages of the cycle(it can't always overlap perfectly). Current bullish channel recovery since the drop that happened at the end of 2018 seems weak . This is in comparison to other sectors. Based on the assumption that Trump wins 2020 and/or US/China Trade deal goes through => I have labelled the ranges of potential wave 5 extension. There are 2 primary targets : 70$ and 75$. Otherwise, there aren't many indications that the current top at 64.4 would be broken. This is just a brief "free" and very detailed analysis. Perhaps in the future I might form a premium group, to whose members I will provide all the details of my research. >> I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories .>> However, if you'd like to support me and learn more in the greatest of details, every thumbs up or follow is greatly appreciated ! -Step_Ahead_ofthemarket- Check my Previous episodes on the US Sectors : EPISODE 5: US INDUSTRIALS (XLI) : EPISODE 4 : Health Care( XLV ) : Full Disclosure: This is just an opinion, you decide what to do with your own money. For any further references- contact me.
AMEX:XLB
by step_ahead_ofthemarket
OEC breakout potentialOrion Engineered Carbons has generally positive analyst ratings and positive earnings growth. Recognia's Elliott Wave analysis puts OEC in a bullish Wave 3 move with a price target of 22.71. OEC missed earnings estimates last quarter and took a pretty big hit. But with the materials sector looking so hot right now, I suspect OEC will indeed break out above the April high of 21.71 and head north to test 22.71. It may even move all the way up to 24.
NYSE:OECLong
by ChristopherCarrollSmith
1
More upside for Rio Tinto pre-earnings?Recognia is flashing am Elliott Wave 3 extension for Rio Tinto, with a price target of $73.86. I'm skeptical that we'll get that high, because it's outside the current trend channel, which I expect to break after RIO reports earnings on August 1. However, I do think it's likely that there's upside ahead as we approach the half-year earnings date. RIO has a low P/E for the industry and a high rating from all the analysts. In addition to the upcoming earnings date, RIO goes ex-dividend August 8. With a 6.33% dividend, the approaching dividend is a significant upside catalyst for the stock. However, there's risk of a trend channel breach on June 16, when RIO publishes its quarterly operations review. Last year, RIO broke downward out of its trend channel on June 15, for reasons I don't fully understand.
NYSE:RIOLong
by ChristopherCarrollSmith
'Set It And Forget It' Trade In XLBXLB (Materials ETF) has been consolidating for weeks and looks like it's getting ready to make a move higher. With Squeezes on both the Weekly and Daily Chart this looks like a 'set it and forget it' type trade: In a perfect world, I'll be looking for a pullback tomorrow where I can pick up the 58/57 Put Credit Spread: Put Credit Spread Sell 58 Jan Monthly Put Buy 57 Jan Monthly Put At the current price, you can nearly get a 1x1 spread is what I like doing. In this case (once again at the current closing price) risking $51 to make $49/contract. This is a trade I want to be able to put on and not have to worry about too much. Ideally, the trade will be near max profit far before the contracts expire. If you'd prefer to play an underlying, you can also trade DWDP which makes up 22% of the ETF. It too has a Weekly Squeeze setting up and its chart looks nearly identical to XLB: Playing the ETF is just an easy way to play to movement of the entire sector which as a whole looks bullish. With the ETF you're less susceptible to things like news based moves that can affect an individual stock without affecting the entire sector.
AMEX:XLBLong
by TheCryptosaurusRex
Mad Breakout to $65? Subtle Climb to $60? Quiet Retrace to $53?Oh Novanta. So many possibilities for such a great company. Please forgive the maddening amount of clustered lines. The primary trend line is massive and seemingly unstoppable for a reason. Even though it's gone parabolic, its story is rock solid and almost sexy with everything they have a hand in. As a leader in medical and advanced, industrial markets, Novanta went through a period of optimization several years ago, is currently in organic growth mode and is accelerating its scale from now until 2020 in order to DOUBLE their annual revenue. Oh, and as of their last public statement, they're still on track to do so. Quality products, leadership and personnel (over 375 engineers), coupled with proprietary technologies and over 400 patents, Novanta maintains a stoic and disciplined M&A schedule in order to maintain its edge and continue to innovate by divesting around 9% of revenue in R&D. The crossover between their sectors is astounding. Organic growth, momentum, acquisitions, a great M&A pipeline and leadership positions across key medical and industrial markets are providing, as Matthijs Glastra said, "...a solid foundation for sustainable, profitable growth." If you want a laser, robotics and high level medical play, this is it. Hold Novanta long term. Short term, if you're looking to just trade and not invest, there's been some massive momentum up from the previously, consistent levels held all of April. Based on how the stock has bounced off its bottom trend line, it was a good period of accumulation leading up to another spurt of gains towards the $58+ level. If it should shoot past this and hit what could easily be $65 (based off the previous $15+ jumps) sell immediately, because everyone else obviously did, twice. A retrace back to $53 off this momentum isn't bad and will surely hold or prep for the bounce back up to the $60 range outlined above.
NASDAQ:NOVTLong
by N3utra
Vale Holding Up Well in a Tough MarketVale is currently benefiting from the rise in iron and copper ore over the last several months. The stock broke out back on 12/20 and ripped higher for weeks until the recent market volatility caught hold of it. However, even as the market as tanked Vale has held up relatively well, ~4.6% vs. ~8.8% drop for the S&P500. Look for the stock to shoot higher is the market turns positive in coming weeks, however not much can survive the carnage we have seen lately.
NYSE:VALELong
by gthom9
How much will overbought Materials Sector Fall? XLBThe Materials Sector SPDR Fund has been in a bull trend since the end of the financial crisis. The trend has narrowed but remains upright since December 2016. The fund has been in a more specific trend channel since February and has created firm support and resistance levels. The fund is currently at that resistance level. Below I have laid out the reasons and levels to which the fund may dip will it continue its overall bull trend. When we take a look at technical indicators, the relative strength index (RSI) is at 64.9868. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is below overbought levels, however, the RSI has developed a resistance point of its own. The RSI has been reaching lower highs since December 2016 and is once again at this key resistance point. If the RSI begins to retreat, the fund should follow suit. The true strength index (TSI) is currently 4.4168. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. Like the RSI, the TSI has created relative resistance since December. This indicator is about to hit that threshold. Failure to substantially break above this resistance, the fund should drop in the near-term. The positive vortex indicator (VI) is at 1.1174 and the negative is at 0.7410. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. These indicators have been in a relatively tight trend since mid-February. When the positive VI was last at its current level, the fund tapered down which ultimately led to a drop to the fund's support line (dotted pinkish-purple on the chart). The stochastic oscillator K value is 92.2124 and D value is 87.3198. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic currently overbought, but the D value has not overtaken the K value, meaning the fund could produce gains for a few more days before ultimately turning downward. The last three times the fund hit its resistance, it did manage to drop down to its support level in less than 12 days. The first drop was in January over 9 trading days and it resulted in a 3.62% decline. March saw a 3.41% decline over then following 6 trading days while April had a 2.91% drop over 11 days. These timeframes and declines could be blueprints for the current bounce off of the resistance level. Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the current position, the fund could drop at least 2% over the next 23 trading days if not sooner.
AMEX:XLBShort
by StockSignaler