From the Desk of Steve Strazza @Sstrazza
The bulls have moved back into the driver seat over the past few months, as a good deal of technical damage was repaired during the summer rally.
It appears that the weakest stocks have at least stopped falling as growth indexes have transitioned to more constructive, base-building action since late Q2.
And, more recently, the strongest sectors during the current cycle have reclaimed key levels.
We’re talking about materials rallying back into their old range and energy stocks resolving above a shelf of former highs.
As both cyclical sectors are now back above our risk levels, we are looking for the strongest stocks to buy to express a bullish thesis on these groups.
When we think about the strongest stocks within materials, the coal industry and its recent resilience is top of mind.
We see no reason why the relative strength from these stocks shouldn’t continue, so let’s dive in and outline some of our favorite charts in the space.