The market has been quiet during the session Thursday after healthy overnight gains. Perhaps traders are busy finalizing their NCAA tournament brackets ahead of the kick-off of March Madness. Despite reclaiming much of Wednesday’s losses, investors are still apprehensive about the volatile nuclear situation in Japan, as well as escalating tensions in the Middle East and North Africa.
Energy stocks have been strong today as investors grapple with the implications of the nuclear crisis. With a likely aversion to nuclear energy going forward, coal producers may stand to benefit, and those stocks are acting well today. The best set-ups in the coal sector appear to be Alpha Natural Resources, Inc. (ANR), Peabody Energy Corporation (BTU) and Patriot Coal Corporation (PCX). Railroads have also been strong in today’s session, led by CSX Corporation (CSX) which broke out from an upper consolidation.
Apple Inc. (AAPL) is working its way out of the doghouse, holding its seven point morning gap up. The company remains extremely undervalued from a fundamental perspective, with Credit Suisse earlier this week slapping a $500 price target on AAPL stock. Other leading tech stocks have been a mixed bag.
The agricultural sector remains a focus, and the ferts opened up nicely this morning before waffling during session. PotashCorp./Saskatchewan (POT) saw early selling pressure after its large gap up, but rebounded and is now trading in the middle of the day’s range. Expect these fertilizer stocks like POT and The Mosaic Company (MOS) to lift if the market continues to rebound.
Right now the market is in a tricky spot, and continues to be dictated by the headlines. First resistance contained this move for now in the 1272-1275 area, showing investors are not yet ready to pile back into longs. Continue to trade with caution and don’t make big bets in either direction at this point.
*DISCLOSURE: Scott Redler is long POT, X, DANG, F, GLD.
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