Happy New Year!
Throughout 2024, I'll be commenting on various sectors, industry groups, and individual stocks that flash breakouts and relative strength, but what about stocks that are just beginning to strengthen? There are many individual stocks that set 52-week and all-time highs as we ended 2023, but these are two that struggled in 2023 and now appear to be headed for a much stronger year:
3M Company (MMM):
It certainly appears as though a lengthy downtrend in MMM has reversed:
Breaking the absolute price downtrend is our first clue that things could be much different in 2024 for MMM. Also, note that the weekly PPO has turned positive for the first time since Q3 2021. The next confirming signal would be a clear reversal to the upside in the relative performance of MMM vs. the benchmark S&P 500. In the bottom panel above, you can see that MMM is challenging that relative downtrend line as we open 2024.
Finally, MMM has a dividend yield of 5.47%, potentially setting up as a nice investment for those with more of an income mentality, as opposed to capital appreciation. Perhaps MMM will provide nice capital appreciation in 2024 as a kicker.
Citigroup, Inc. (C):
C broke a similar downtrend during Q4 2023, after trending lower with most banks. Inverted yield curves historically impact banks the strongest as they squeeze banks' net interest margins, which is a key driver in bank earnings. The stock market looks ahead, however, and I believe the expectation of multiple rate cuts in the fed funds rate is helping to drive current outperformance of banks. It's quite likely to continue in 2024. On the C chart, you can see the reversal in its downtrend rather clearly:
In addition to the more favorable price chart, C also boasts a strong 4.04% dividend yield, providing another solid income option for that style of investor. Any additional capital appreciation would be icing on the cake.
On Monday, I will provide a technology company that appears poised for a very strong 2024. There will likely be a couple triggers to watch for to confirm a strong year ahead, but the recent absolute and relative price strength, along with an excellent AD line is providing early bullish signals. If you'd like to see this chart, I'll send it to your email address Monday morning. Register HERE for our FREE EB Digest newsletter.
Also, next Saturday, January 6th is our annual MarketVision virtual conference. Grayson Roze, StockCharts.com's Director of Operations, will join me for "MarketVision 2024: Beyond The Fed", where I'll provide my 2024 stock market forecast and S&P 500 target. It was one year ago that I accurately forecast that the S&P 500 would reach 4700 by the end of 2023. There weren't many bulls to be found a year ago, but as it turned out, the bullish side was the right side as the S&P 500 gained 24% to finish the year at 4769.83. I thought we'd see roughly 23%. 1% off, not bad. For more information and to register for this year's event, CLICK HERE.
Happy New Year and happy trading!
Tom
