When the market is spiking up and down like it has recently, it can be hard to read through to areas of strength.
One area that I have been keeping an eye on is the materials space, as many of the names have been consolidating since May. I've entered a few trades, only to get stopped out. These names are important for the conversion to electric energy. Some of the odd metals, like Zinc, along with more popular metals, like Copper, are mined by these companies that we need for the transition. When the group of these important names are turning higher, I want to be ready as well.
This week looks a little more promising. The big 5 miners are inviting some attention to start December. First up is TECK, which made a breakout above $27 and pulled back. Last week was a smaller range; this week we closed with a nice outside bar. After three weekly closes below the 10-week moving average (WMA), we closed at it this week and, at $27, it appears ready to rise above that level again.
Freeport (FCX) continues to test my patience. It tested the resistance level around $39 again this week and closed above both the moving averages. The PPO momentum bounced off zero in September and is patiently making a higher low. Can it finally break out and hold?
BHP Billion - I mean Billiton - looks set to run up here as well. A nice double bottom base suggests this is finally ready to make the turn higher. The PPO momentum seems ready to give us a buy signal next week. A break through resistance would probably get a few more swing traders on board as well.
VALE is well on its way to higher highs. It broke a big downtrend last week and continued higher this week. The stock was down almost 50% from the highs; a push back up here suggests lots of room to get to former highs.
Lastly, RIO is the weakest-looking one, but it looks to be two weeks behind the Vale turn shown above. It did push above the 10-WMA to close out the bar.
The top on these charts didn't catch us off guard in the spring, but they have stayed down longer than I might have expected. If we can participate in the next leg higher, I am interested, because their uptrends can garner significant gains every week. They moved up 5% on the week, which is a robust start. Sometimes, it is all about the hunt, and I have been hunting them for a while. In this case, I am looking for Santa to help kickstart the next leg of the big bull trend.
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies
Want to stay on top of the market's latest intermarket signals?