Stock market action has settled down a bit over the last week. The recent shocks of the Ukraine war starting, commodity prices soaring and both North American central banks starting to raise this month have passed and new expectations appear to have been priced in by investors. In this issue of Equity Leaders Weekly, we look at what recent strength in Canadian stocks and a rebound in US small caps are telling us about investor sentiment.
This three-year chart highlights the importance of yesterday’s breakout by United Rentals (URI). Back in December, URI successfully retested support near $285 and since then, it has been clawing back lost ground. Two weeks ago, the shares broke out over their 50-day moving average and since then, accumulation has accelerated. Yesterday, URI broke out over $350, calling off a bearish head and shoulders top pattern that had been forming and confirming the start of a new upswing.
A classic upturn is underway in Arista Networks (ANET) shares. After gapping up in November, the shares peaked in December and then fell back in a correction through January which bottomed out in February when another breakdown was quickly rejected. It turns out that was the head of a reverse Head and Shoulders base that started forming in late January.
With commodity prices climbing and resource producers attracting renewed interest, Lithium Americas (LAC.TO) has returned to the Green Favored Zone in the SIA S&P/TSX Composite Index Report from a short dip down into the red zone. Yesterday the shares jumped 51 positions to 54th place.
Nvidia (NVDA) staged a major breakout on Friday. Since peaking in November, NVDA had been under distribution, establishing a downtrend of lower highs. Through February and March, support started to emerge above the $200.00 round number. Last week, the shares started to climb on increasing volumes, a sign of renewed accumulation that was confirmed on Friday with the shares breaking through $250.00, snapping a downtrend line and retaking their 50-day moving average. Initial support appears at the 50-day moving average near $245.00.
Farm equipment producer Deere & Co (DE) has been climbing up the rankings in the SIA S&P 500 Index Report since December and recently reached its highest ranking since May of 2021. Yesterday, DE finished in 36th place, up 4 spots on the day and up 22 positions in the last month.
Movie, streaming and cable giant Paramount Global (PARA) spent most of the last year stuck in the red zone of the SIA S&P 500 Index report but has roared up the rankings lately, recently returning to the Green Favored Zone for the first time since March of 2021. Yesterday, PARA finished in 98th place, up 17 spots on the day and up 381 positions in the last month.
In this issue of Equity Leaders Weekly, we take our monthly look at the implications of rising US interest rates and an interesting divergence by the Dow Transports.
Back in January, a pullback in AON (AON) shares was contained by support near $260.00, a former resistance level. Since then, signs of renewed accumulation have become more apparent. A new upward trend of higher lows as emerged, the shares snapped out of a 5-month downtrend and yesterday, AON broke out over $300.00 and completed a bullish Ascending Triangle pattern.
Continuing an upward trend in relative strength that began nearly a year ago deep in the red zone, Pfizer (PFE) recently bottomed out at a higher low within the SIA S&P 500 Index Report and has returned to the Green Favored Zone from a short dip into the yellow zone. Yesterday, Pfizer jumped 44 positions to 120th place and it is up 6 spots in the last month.
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