After a small down open Wednesday, US equity markets continued to fall early in the session before paring the intraday losses. In Japan, reconstruction cost estimates have been pegged at around $300 billion and concerns about nuclear radiation continue as dangerously high levels of iodine have been found in Tokyo’s drinking water. Coalition air attacks are being carried out sporadically in Libya, and protests continue in Syria and Yemen. Forex traders are watching the situation in Portugal, where a key parliamentary vote on austerity measures is up in the air.
While the market remains in the red on the day, there are plenty of stocks exhibiting relative strength. Among stocks we have highlighted over the past two days on the Morning Call show, several are acting well in today’s session. Freeport-McMoRan Copper & Gold Inc. (FCX), after putting in an igniting bar last Tuesday to poke above its recent downtrend, has finally busted through its 50-day moving average. Short-term cash flow traders could look to start taking some shares off, but Scott Redler’s ultimate target for the trade is $58.
Chinese Names Go Green
Baidu.com, Inc. (BIDU) is another stock that held up well as the market came under pressure over the last couple weeks, and has been a monster the last two days. After breaking out of its recent consolidation yesterday, BIDU has tacked on 2% more gains today and looks like it could make new highs sooner than expected. The other two China names we highlighted this morning, SINA Corporation (SINA) and Sohu.com, Inc. (SOHU), are also positive on the day and look poised for higher prices.
Day Arrives for JDSU, LVS
Yesterday we noted that we were probably a day or two early on a couple of long ideas, JDS Uniphase Corporation (JDSU) and Las Vegas Sands Corp. (LVS). JDSU, we feel, was unfairly punished by a poor report from fellow optical networking company Finisar Corporation (FNSR), thus some traders have been stalking it for a bounce. The stock got a nice push off the open this morning before consolidating some of those gains. After opening slightly lower, LVS has trended higher all day, and looks to have put in a bottom in the $36.35 area.
Precious Metals
Gold and silver have also been strong during the session, with silver once again making new highs and gold close behind. Miners, which were highlighted in the Morning Call over the last two days, have also been strong today. Silver Wheaton Corp. (SLW), a Magnet Stock Selection pick from Jordan Kimmel on Monday, is up 4% on the day, while Coeur d’Alene Mines Corporation (CDE) and Goldcorp Inc. (GG), highlighted by Alix Steel this morning, are up 3.55% and 2.25%, respectively.
Banks Weak
The banking sector remains relatively weak. The group got hit overnight and right off the open today on news that the government would not allow Bank of America Corp. (BAC) to go through with its proposed dividend hike. Banks bounced late last week when officials approved dividend hikes by other bailed out banks, but by denying BAC the government is indicating its view that all is not back to normal for the sector.
At this point, the market is holding up well again after coming under some selling pressure. After a multi-day bounce amid a myriad of volatile headlines around the world, it is not surprising to see the market pause and digest. However, it still feels like the market wants to go higher once the world resolves more of the current pressing issues.
*DISCLOSURE: Jordan Kimmel is long SLW. Scott Redler is long VLO, AMZN, JDSU, POT, FCX, LEI, NYX, SLV, GLD; Short SPY
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