ALUMINUM AND STEEL STOCKS BOOST MATERIALS -- HOMEBUILDERS CONTINUE TO BREAK OUT -- CHIP LEADERS

John Murphy
by John Murphy,
Pioneer Technical Analyst

MATERIALS NEAR RECORD... In a generally positive market day, materials are one of the days strongest sectors.  Chart 1 shows the Materials Sector SPDR (XLB) gapping higher and nearing a new record.  It's being led higher by aluminum and steel stocks which are also having a strong day.   Chart 2 shows the Dow Jones Aluminum Index gaining 6% on the day.  Steel stocks look even stronger.  Chart 3 shows the Dow Jones Steel Index surging to a new record.  Homebuilding stocks are also having a breakout day of their own.

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HOMEBUILDING RECORD... My St. Patricks's Day message showed homebuilders hitting a new record.   They're doing it again today.   Chart 4 shows the U.S. Home Construction iShares (ITB) rising into record territory today.   Chart 5 shows PulteGroup (PHM) hitting a new record as well.  Chart 6 shows DR Horton (DHI) doing the same.   Homebuilders are the strongest part of the Consumer Discretionary SPDR (XLY).

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CHIP LEADERS... My Wednesday message showed the Semiconductor ETF (SMH) trading below its 50-day moving average.   A number of individual chip stocks, however, are trading above that resistance line.   One of them is hitting a new record.   Chart 7 show Applied Materials (AMAT) in record territory today and well above its 50-day line.   Chart 8 shows Lam Research (LRCX) bouncing off its 50-day line today.   Chart 9 shows KLA Corp (KLAC) rising above its 50-day line in today's trading.   Those three stocks are boosting the entire chip group.

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John Murphy
About The Author:

A trailblazer in intermarket analysis, John authored key texts that shaped technical trading and helped generations of investors decode market trends using charts and correlations. Learn More 

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