As a responsible investor, I refuse to ignore strength. That includes stocks making fresh highs.
Despite what you may have heard from the major cable networks, many stocks aren’t going down. In fact, many fit our definition of "strength."
Out of all the fresh highs coming in, these three bellwethers take the cake…
Freeport-McMoRan
We look at Freeport-McMoRan $FCX as a proxy for Dr. Copper. Both are economic barometers, and both are posting new multi-month highs:
This is a bullish development for global risk assets, including commodities and their related stocks.
As long as FCX trades above 40, our outlook is higher toward 62, with a target of 97 over longer timeframes.
Newmont Corp.
Here’s the gold mining behemoth, Newmont Corp. $NEM, carving out a decade-long base:
We consider these bellwether stocks as indexes in themselves. It’s no wonder NEM looks similar to the Gold Miners ETF $GDX.
As GDX fired a buy signal earlier in the week, NEM confirmed the move by following suit yesterday.
I’m bullish NEM on strength against 53, targeting 75 in the coming 2-4 months. But I think a new secular bull market for gold and its associated mining stocks has just begun.
So NEM likely has legs, hitting that hundred-dollar roll of 110 quicker than many expect.
Cameco Corp.
It’s a good sign for commodities and cyclical assets in general when uranium stocks catch a bid. These are highly speculative names among cyclical stocks.
A bid in Cameco Corp. $CCJ speaks to a healthy risk appetite among these market areas.
Check out CCJ reclaiming a critical retracement level:
The CCJ chart isn’t the cleanest. Regardless, we want to give this name the benefit of the doubt above 25.
If it trades above there, I like it long with an initial target of 37 and a secondary objective of 56. And if CCJ is printing fresh highs, smaller uranium stocks likely track higher.
That’s what bellwethers do – they lead.
It’s impossible to overstate the impact these stocks have on their individual industry groups and global risk assets. They’re crucial.
I’m a huge advocate for tuning out the noise and highly recommend it. But to ignore fresh highs in these market leaders is downright irresponsible.
Now that they’re catching a bid, stock market bulls worldwide want to see their risk levels hold.
Stay tuned!
COT Heatmap Highlights
Commercial hedgers adjusted their coffee exposure, pulling within 5% of their largest long position in three years.
Commercials' long exposure to crude oil remains at three-year extremes, as hedgers added another 55,000 contracts this week.
And commercial hedgers carry a net-long lumber position within 40 contracts of a three-year extreme.
