In his first Executive Decision segment of "Mad Money" Monday, host Jim Cramer spoke with Ward Nye, chairman, president and CEO of Martin Marietta Materials (MLM) , on the heels of the aggregates supplier's analyst day.
Nye said while pricing for products typically remains strong during downturns such as the pandemic, what we are seeing now is both good pricing coupled with good demand. He said the boom in housing, expected government spending and the economic reopening all are contributing to record performance.
When asked about the prospects of Democratic-led infrastructure spending, Nye noted that the U.S. hasn't seen significant federal infrastructure spending in almost 15 years.
Let's check out the charts and indicators of MLM.
In this daily bar chart of MLM, below, we can see that prices have more than doubled from their March 2020 low. Prices are trading above the rising 50-day moving average line as well as the positively sloped 200-day moving average line. Trading volume has been active and the On-Balance-Volume (OBV) line shows a rise from May to date. A rising OBV line is a sign of aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line for much of the time since June.
In this weekly Japanese candlestick chart of MLM, below, we can see a mostly bullish picture. Prices are still in an uptrend above the rising 40-week moving average, but notice the latest candles. We can see a long-legged doji or rickshaw man pattern followed by a spinning top. No confirmation yet, but it does give us pause. The weekly OBV line has made a new high like prices have, so we don't have a bearish divergence. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of MLM, below, we can see a potential upside price target in the $431 area.
Bottom line strategy: When we last looked at MLM back on July 30, 2020, we wrote, "MLM could see a sideways to lower trading pattern in the weeks ahead. This price movement could broaden its basing pattern and may allow for an advance later in the year." MLM continued sideways into late September before launching a fresh uptrend. With two potential top reversal patterns on the weekly chart of MLM we might be in for another sideways period of price action before renewed strength. I would prefer to wait several weeks before recommending purchases.