These Burly Charts Are Worth a Look

 | Apr 08, 2014 | 9:40 AM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

LQD

,

icf

,

icf

,

vale

,

tck

,

czz

,

swk

,

amx

While it has only been a few days of harsh selling, bulls are already saying, "Enough already!" The relief is expected to come in the form of an oversold bounce. Or maybe it'll come via a turnaround Tuesday. Or maybe we'll see great earnings expectations from Alcoa (AA) -- but seriously. While any of this may come soon, I think it's worth going over some of the names that ended up at the top of my daily momentum scans.

Momentum Screen Results
Source: Tim Collins

While I've now whittled this list down to a little less than half of the original, a lot of the charts I eliminated were ETFs that were extremely similar to ones that stayed on, or stocks that were major components of ETFs. What surprised me the most was the mix of the results. Unsurprising, however, were the inverse ETFs which appeared on the charts -- included those of the Nasdaq, the Russell 2000, the S&P 600 and the financials.

Momentum Charts I
Source: StockCharts.com
Momentum Charts II
Source: StockCharts.com

There was also a strong mix of bonds in the screen, from corporate to municipals. If this broad-market selloff is being driven by the Fed's continued tapering of stimulus, then that is a bit surprising. If high-frequency trading is pulling off the bid, then this shouldn't be a shock in the least. The setup on the iShares iBoxx Investment Grade Corporate Bond Fund ETF (LQD) looks particularly compelling.

Dividend yield, beyond the bonds, is still a theme at the moment. Nearly half the list comprises various types of real estate investment trust equities, even after quite a few names were removed. There is a wide variety of REITs here, from mortgage to retail to specialty -- the latter of which is a range in itself. Of course, Realty Major iShares (ICF) is on the list as well. One of the main reasons I didn't cut the list down more than I had already done was because of the absolute strength in these charts, along with the diversity within the sector.

The individual names are worth noting, as well, since they are still showing strong charts in the wake of a market pullback. Of course, three of the names, Vale (VALE), Teck Resources (TCK), Cosan (CZZ) and America Mobil (AMX), are companies based outside of U.S., but the Stanley Black & Decker (SWJ) is one to target if looking for an upside play.

Columnist Conversations

Just some resistance to be aware of. Not saying it will cap the market, just that it is there for a decision....
Shares of Amazon (AMZN) are trading down below the 50% retracement level of their 2014 range in the after-hour...
Conclusion LNKD has a strong upward trend in revenue, has maintained very high gross margin % even as revenues...
Kass:
On the weaker than expected #s. From $143 to $106.

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.