Equity Clock

Stock Market Outlook for February 25, 2021

The cold-snap in Texas has led to a highly abnormal plunge in oil and gas production in the past week, but are the fundamentals still supportive of the energy trade into the spring?

 

 

 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

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Dollarama Inc. (TSE:DOL.TO) Seasonal Chart

Williams Cos., Inc. (NYSE:WMB) Seasonal Chart

B&G Foods Inc. (NYSE:BGS) Seasonal Chart

Exponent, Inc. (NASD:EXPO) Seasonal Chart

Penn National Gaming, Inc. (NASD:PENN) Seasonal Chart

Neptune Technologies & BioResources Inc. (NASD:NEPT) Seasonal Chart

Lifetime Brands, Inc. (NASD:LCUT) Seasonal Chart

Popular, Inc. (NASD:BPOPN) Seasonal Chart

Prudential PLC (NYSE:PUK) Seasonal Chart

iShares Core Balanced ETF Portfolio (TSE:XBAL.TO) Seasonal Chart

 

 

The Markets

Stocks closed higher on Wednesday, reversing early session losses, as investors continue to place their bets on economic reopening plays.  The S&P 500 Index gained 1.14%, following through with the massive reversal that was realized at the 50-day moving average following the Fed’s comments during Tuesday’s session that they will remain accommodative .  The market activity continues to emphasize that the buy-the-dip mentality remains alive and well, particularly around the intermediate moving average.  The benchmark is back on its way to testing the upper limit of its rising trend channel following the test of the lower limit in the Tuesday session.  The approximately 120-point range sees its upper limit closing in on 4,000, a major psychological hurdle.  Momentum indicators continue to negatively diverge from price, indicating waning buying demand, but, as we’ve noted, this has not prevented the market from drawing in the next marginal buyer or investor looking to buy the dip.  The next couple of sessions could see some gyrations surrounding the end of the month as portfolio managers execute their final trades for the period, however, the end of February event is typically not that significant when compared to end of quarter rebalancing, which we will look out for in March.

Today, in our Market Outlook to subscribers, we discuss the following:

• The change in petroleum inventories/production in the past week and what it means for the seasonal trade in the energy sector
• New Home Sales in the US
• Homebuilding and construction stocks
• The significantly oversold state of the bond market and what the opportunity is

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On schedule for the Wednesday session, the Energy Information Administration (EIA) released petroleum inventory data for the week just past.  The EIA reported that oil inventories increased by 1.3 million barrels last week, which was a divergence compared to the 5.19 million barrel draw that was expected by analysts.  Gasoline stockpiles, meanwhile, increased by 12,000 barrels.  The result saw the days of supply of oil jump by one and a half days to 32.8, while gasoline days of supply jumped by over half of a day to 32.9.  The average days of supply for each through this point in February is 23.2 and 27.4, respectively.  We sent out further insight to subscribers intraday.  Subscribe now.

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.70.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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