This week we're looking at a long setup in the Fertilizer space. We've noticed a growing trend in this sector and have covered more stocks here.

We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

Over the past few days as the market continued to churn sideways, we witnessed a set of stocks doing well as a group. As sector rotation continues to play out, we see different groups play the game of musical chairs as they move in and out of strong and weak zones.

Fertilizer stocks seemed to have gotten activated recently and there a few names here that we've been tracking for some time.

Let's take a look at the individual names:

The first one here is GSFC. Gujarat State Fertilizers & Chemicals. What we see here is a three-year base breakout with the price moving past its long-term resistance of 114. As the overhead supply has been absorbed at these levels, the price is now ready to move higher in the next leg of the rally.

The indicator has been in the bullish momentum territory, staying rather close to this zone during interim corrections as well.

We are bullish above the level of 114 with a target near 167.

Click on chart to enlarge view.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Lumber futures have been on an absolute tear since last spring. The vertical but volatile price action off last year's lows is something for the history books.

After trading down to 250 in late March of 2020, Lumber has since shot back above 1,600, where it trades today. It’s no wonder social media is full of people flaunting their wealth with stacks of timber. 

But we have to ask... is it time for a pullback? Is this rally overdone here? 

Let’s take a deeper look and discuss why we believe the logical move for Lumber over the short term is sideways... or even lower.

Here’s the chart. Look at that face ripper - up nearly 7x in just over a year!

From the desk of Willie Delwiche.

Reporter: "Why do you rob banks?"

Willie Sutton: "Because that's where the money is."

True 'nuff. And the same could probably be said of insurance companies, no?

With this in mind, we've got a mid-cap dividend paying insurance company with a beautiful trend thats looking like it wants more.

From the desk of Willie Delwiche.

I planted most of the vegetables for the garden over the past couple of weeks. Seeds and seedlings. Neat rows and clustered groups. Into the raised beds they went.  

I don't know what the day to day (or week to week) fluctuations in the weather will be. But I do know that it is (finally) Spring. Planting as the air temperature rises and our daylight hours expand increases the likelihood of a bountiful garden later this summer. Leafy greens (kale, arugula, chard) were the first into the soil. They can withstand cooler temperatures than the cucumbers, peppers and tomatoes.

As a gardener, I have some understanding of the underlying trends and conditions that guide the seasons. Plant too soon and a late frost will kill off tender seedlings. Plant too late and the summer heat will sap the strength of plants without well-developed root systems. 

It's about knowing the growing environment, managing temperature risks and finding opportunities to increase vegetable production.

Some might dismiss this as a farmer’s market timing. I call it prudent.

These are the registration details for our live monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Monday May 24th at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday night:

This is the video recording of the May 13th Town Hall Meeting w/ Willie Delwiche & JC Parets

05/13/21 2PM ET

From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @Granthawkridge

We’ve been vocal about the strong market internals supporting equities for some time.

We’ve seen one extreme breadth reading after the next from just about all of the major indexes and sectors since last summer.

One index that hasn’t shown a bullish initiation thrust like its peers is the Nasdaq.

We recently pointed out the NASDAQ Composite showing a substantial deterioration in 52-week highs the past few weeks...

But there are still areas of the market with strong & expanding internals. Breadth data continues to be mixed just like we’re seeing from many asset classes right now.

Using equities as an example, while growth has been weak, value and cyclical areas remain strong.

From the desk of Willie Delwiche.

JC and I were talking about the market last week in one of our town hall meetings.

"It's a market of stocks," he said, offering up the old Wall Street adage about looking at market health by looking beneath the surface. 

I don't dispute the wisdom embedded in that comment. It's an adage for a reason.

But my response to JC was, "No, it's a market of sectors." 

Let me explain… 

From the desk of Steven Strazza @Sstrazza

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.

While you can try to guess the chart, the point is to make a decision…

So let us know what it is… Buy, Sell, or Do Nothing?