First we have been mentioning the healthier action in cyclical stocks
the past week and a half - you can see this in names such as Harley
Davidson (HOG) which faces the consumer and Caterpillar (CAT) which is
the essential cyclical stock. The former broke out of a range today on
very good volume while the latter broke out of a long term downtrend
late last week. CAT jumped over its 200 day moving average last Friday
and 50 day today; in many ways it is acting similar to Apple after a
long downtrend.
Meanwhile
two stocks that were very hot cooled off today - First Solar (FSLR) and
Tesla Motors (TSLA). These both have relative strength readings in the
mid to upper 90s as they have been market darlings. Tesla is doing
this right in front of its earning report tomorrow - no surprise as it
is always a flip of the coin how a stock will do on its earnings and
some momentum traders don't want to be around for that.
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