The commodity stock strength we wrote about here last week, promptly reversed on Tuesday and did the opposite of last week’s action. As of yesterday, here's where we stand:
- Alcoa (NYSE:AA): -2.66%, remains above its 50 and 200 day moving averages. EPS estimates moving in the right direction. AA is up about 22% YTD.
- Peabody Energy (NYSE:BTU): -3.71% on average volume. Coal is a beaten-down value sector. The stock remains above its 50 and 200 day M/As.
- Freeport-McMoran (NYSE:FCX): -1.74% but still above the 50 and 200 day M/As.
- U.S. Steel (NYSE:X): -4.42% on 2(x) average volume. X took out its 200 day moving average on volume, which we don’t like to see. X does tend to outperform in the 4th and 1st quarters of the year;
- S&P 500 (ARCA:SPY): -0.63%
We are long Market Vectors Coal (ARCA:KOL) and Market Vectors Steel (ARCA:SLX) (the steel ETF) in a few accounts, too.
We like Basic Materials through year-end 2014 and remain overweight the sector, although we don’t have much chemical exposure and chemicals are a big part of the sector.