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Stock Market Outlook for February 21, 2019


S&P 500 Index just realized the fastest move from oversold to overbought since the end of 2014.

 

Real Time Economic Calendar provided by Investing.com.

 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

Hardinge, Inc. (NASD:HDNG) Seasonal Chart

Hardinge, Inc. (NASD:HDNG) Seasonal Chart

Activision Blizzard Inc. (NASD:ATVI) Seasonal Chart

Activision Blizzard Inc. (NASD:ATVI) Seasonal Chart

Vicor Corp. (NASD:VICR) Seasonal Chart

Vicor Corp. (NASD:VICR) Seasonal Chart

Western Gas Equity Partners, LP (NYSE:WGP) Seasonal Chart

Western Gas Equity Partners, LP (NYSE:WGP) Seasonal Chart

 

 

The Markets

Stocks punched out another gain on Wednesday as investors digested the minutes from the recent Fed meeting and await further news pertaining to trade negotiations between China and the US.  The S&P 500 Index closed higher by just less than two-tenths of one percent, achieving the third straight session firmly above the benchmark’s 200-day moving average.  The benchmark remains mere points from a major hurdle at 2800, which if exceeded would suggest a break of the trend of lower-lows and lower-highs stemming from the September peak.  A catalyst may be required.  Headlines indicate that top officials will be meeting in Washington staring today to discuss a resolution to the China-US trade dispute.  The 14-day Relative Strength Index (RSI) for the large-cap benchmark is showing the first overbought reading (>70) since the end of August.  This is the fastest the index has moved from oversold to overbought since late 2014 when the momentum indicator took 23 sessions to move from below 30 to above 70.  The recent run amounts to 37 sessions from oversold to overbought.  Back in 2014, the oversold rally to new overbought highs was countered with a period of consolidation that spanned approximately 43 sessions thereafter, testing and confirming support at the 200-day moving average before the rising trend continued.  A similar outcome this time around is a reasonable expectation where the breakout above the long-term moving average is tested to confirm support before new highs can be achieved.

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Topping the leaderboard during Wednesday’s session were materials as commodity prices moved higher.  The S&P 500 Materials Sector Index gained 1.7% moving back to horizontal and variable resistance around the 200-day moving average.  Positive momentum divergences with respect to MACD and RSI through the fourth quarter of last year pointed to waning selling pressures, leading into the rebound attempt from the December low.  Seasonally, the materials sector tends to gain between January and May, benefitting from the improvement in commodity prices amidst the rebound is manufacturing activity into the spring.  Investors in the Seasonal Advantage Portfolio have seen significant benefits from the price gains in this sector in recent days.  Want to gain exposure?  Email us at seasonalportfolio@equityclock.com and we’ll send you more information on this managed portfolio solution that is seeing its value chart new all-time highs.

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Materials Sector Seasonal Chart

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.79.  The indicator continues to hold around multi-month lows, but it has yet to point to outright complacency, as was the case at the start of last year.

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Seasonal charts of companies reporting earnings today:

Agree Realty Corporation (ADC) Seasonal Chart Air Lease Corporation (AL) Seasonal Chart Alliant Energy Corporation (LNT) Seasonal Chart Allscripts Healthcare Solutions, Inc. (MDRX) Seasonal Chart Baidu, Inc. (BIDU) Seasonal Chart Barclays PLC (BCS) Seasonal Chart BJ's Restaurants, Inc. (BJRI) Seasonal Chart Boyd Gaming Corporation (BYD) Seasonal Chart Brady Corporation (BRC) Seasonal Chart Bunge Limited (BG) Seasonal Chart Caesars Entertainment Corporation (CZR) Seasonal Chart Casella Waste Systems, Inc. (CWST) Seasonal Chart Century Aluminum Company (CENX) Seasonal Chart Comstock Resources, Inc. (CRK) Seasonal Chart Consolidated Edison Inc (ED) Seasonal Chart Delphi Technologies PLC (DLPH) Seasonal Chart Domino's Pizza Inc (DPZ) Seasonal Chart Eldorado Gold Corporation (EGO) Seasonal Chart  First Solar, Inc. (FSLR) Seasonal Chart Fluor Corporation (FLR) Seasonal Chart Gildan Activewear, Inc. (GIL) Seasonal Chart Hecla Mining Company (HL) Seasonal Chart  Hormel Foods Corporation (HRL) Seasonal Chart Intuit Inc. (INTU) Seasonal Chart  Newmont Mining Corporation (NEM) Seasonal Chart Norwegian Cruise Line Holdings Ltd. (NCLH) Seasonal Chart Pembina Pipeline Corp. (PBA) Seasonal Chart Quanta Services, Inc. (PWR) Seasonal Chart  Scientific Games Corp (SGMS) Seasonal Chart Teekay Corporation (TK) Seasonal Chart The Kraft Heinz Company (KHC) Seasonal Chart Toro Company (The) (TTC) Seasonal Chart Visteon Corporation (VC) Seasonal Chart Vonage Holdings Corp. (VG) Seasonal Chart Wendy's Company (The) (WEN) Seasonal Chart Zillow Group, Inc. (ZG) Seasonal Chart

 

 

S&P 500 Index

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TSE Composite

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