Should We Start Watching Noncyclical Stocks?

The past week has been very challenging as the market can’t seem to pick a direction. Though short-term momentum has more overhead pressure, even the bears have had difficulty shorting the choppy price action.

In times like these, it can be helpful to take a step back and watch key price levels in the major indices and relate them to trading levels within our personal trades.

Sometimes you can even find trades that are going against the short-term trend.

M4-Stock Charts

With that said, this can also be a great time to start watching areas, like non-cyclical stocks. In the above chart of the four major indices, only the () has broken its support from Monday’s trading range. However, it was able to close over the low from the Jan. 24 at $191.23.

Other indices, including the (), (), and the () are well within Monday’s range and ended the week over or near last Monday’s high.

Though Mish has pointed to stagflation for a while now, it continues to play a role through 2022 and can lead us towards areas to focus on. For instance, non-cyclical companies that people will continue to buy from no matter the economic situation. Two of the sectors we’ve been watching are medical and parts of the retail space.

For the medical space, we’ve been watching Vertex Pharmaceuticals (NASDAQ:) and Levi Strauss & Co. (NYSE:) for the retail space. While Friday, VRTX closed a whopping +6% on the day, its strong upward trend means it’s worth watching for another trade setup. When it comes to LEVI it will need to hold its 10-Day moving average at $21.72.

However, even noncyclical stocks are subject to overall market pressure if the indices begin to break down. Therefore, we should keep an eye on the major indices to hold over last Monday’s low from Jan. 24.

ETF Summary

  • S&P 500 (SPY) 442.42 the 200-DMA to clear.
  • Russell 2000 (IWM) 208.76 resistance. 191.23 minor support.
  • Dow (DIA) Flirting with the 10-DMA at 346.99.
  • NASDAQ (QQQ) Like this to hold over 350.
  • (Regional Banks) 68.74 support the 200-DMA.
  • (Semiconductors) 257.24 needs to hold.
  • (Transportation) 248.85 support to hold.
  • (Biotechnology) 122.50 support.
  • (Retail) 75.62 low to hold.
  • Junk Bonds () 104.73 minor support.
  • () 20.37 next support level.
  • (US Fund) 58 support.
  • (iShares 20+ Year Treasuries) Watching for 140 support to hold.
  • (Agriculture) 20.37 resistance area.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Comments are closed, but trackbacks and pingbacks are open.