Yesterday, was a George Costanza day (you have to be a Seinfeld fan) yesterday, as the commodity stock strength we wrote about here last week, promptly reversed and did the opposite of last week’s action.
Alcoa (AA): -2.66%, remains above its 50 and 200 day moving averages. EPS estimates moving in the right direction. AA is up about 22% YTD.
Peabody Energy (BTU): -3.71% on average volume. Coal is a beaten-down value sector. The stock remains above its 50 and 200 day m/a’s.
Freeport McMoran (FCX): -1.74% but still above the 50 and 200 day m/a’s.
Us Steel (X): -4.42% on 2(x) average volume. X took out its 200 day moving average on volume, which we don’t like to see. X does tend to outperform in the 4th and 1st quarter’s of the year;
SP 500 (SPY): -0.63%
We are long KOL and the SLX (Steel ETF) in a few accounts, too.
We like Basic Materials through year-end 2014. We remain overweight the sector, although we don’t have a big Chemical exposure and Chemicals are a big part of the sector.
Trinity Asset Management, Inc. by:
Brian Gilmartin, CFA