Launching Pad?

11 months ago 33

31 August 2024

Having spent a bit of time surveying charts this long weekend while building TAOST Power List, I noticed something... an inordinate number of candidates [non TPL candidates alike] look poised to fly. As I only see moments like this on occasion, I figured I would post about it so that, if for no other reason, I would have a reference point for my "I told you sos."

To be clear, I'm not the only pro suggesting higher stock prices are a comin'. In fact, as you'll see below, the expected round of interest rate cuts by the Fed [which reverse the cycle of increases started in March 2022 at the impossible level of 0% and ending in July 2023 at the current level of 5.25%-5.50%) has been in view for a lot of sectors and traders for some time now.

I'm posting several ETFs here for the sake of brevity, but do know that there appear to be thousands of stocks poised similarly.

Sector ETFs

XLF - Financials - Already fulfilled the pattern. The only question now is how far... a good target is the $53 area.

XLK - Technology - Lower prices of sharp pullback during the month beautifully rejected.

XLC - Communication Services - Bullish monthly pattern, though I don't love the sharpness of the V.

XLY - Consumer Discretionary - this ETF has yet to fulfill this monthly pattern, but if last month's rejection of lower prices is any indication, the all-time high at $215.06 should be relatively easy... and assuming consumers keep spending headed into the holiday season with likely falling interest rates, even higher is on the table.

XLP - Consumer Staples - this move out of the recent monthly range is likely just getting started.

XLE - Energy - general direction is higher... though I don't expect tremendous price movement given the $80 range the ETF has lived in going back to 2004.

XLV - Healthcare - ETF already made it's break out of a 3 year monthly range. Look for a target in the mid 160s.

XLI - Industrial - these companies started to look through the rising interest rates sooner than many others and reversed higher. My first target for this break is around $132, so for all intents and purposes, reached. I don't have a strong feel for how far it can run, but falling interest rates can definitely add nitro.

XLB - Materials - this monthly chart is just getting going. My target here is around the $115 level.

XLRE - The broader real estate ETF has a ways to go to achieve all time highs. This is primarily due to the havoc wreaked by commercial real estate holdings and performance.

XHB - The homebuilders left the station awhile ago and already reached my target of $121. No real feel for the next stop, but given the July & August monthly candles, I imagine it's higher.