1/16 Cautiously Bullish. 320 Buying | 240 Selling.
% Stocks Over 50SMA is Bullish. Primary Indicator is Bullish. 20% Weekly is Bullish – Caution.
The market showed broad strength with modest gains in major averages despite mega-cap tech profit-taking, led by strong semiconductor earnings and defensive sectors. The chip sector remains a focal point with TSM’s upbeat capital spending guidance fueling AI-related names, while financials rallied on solid earnings from Morgan Stanley and Goldman Sachs. Energy and healthcare lagged amid falling oil prices and regulatory delays. Small and mid caps outperformed, signaling a continued rotation away from mega caps.
Industrials and defense sectors showed notable late-day strength with breakout setups in defense primes and logistics names (HII, ODFL, RS). Homebuilders and building products displayed sustained momentum, supported by broad group participation (LEN, DHI, PHM). Semiconductors and tech were mixed, favoring selective momentum rather than broad beta. Precious metals and miners showed weakness, suggesting caution in that space near term. Utilities and financials provided steady support.
Key upcoming catalysts include Friday’s December Industrial Production and Capacity Utilization data, plus the NAHB Housing Market Index, which could influence sector rotation into housing and industrials.
Key Takeaway:
Focus on selective continuation plays in defense (HII, LMT), logistics (ODFL), and homebuilders (LEN, DHI, PHM) where volume confirms momentum and support holds. Avoid chasing precious metals/miners until they reclaim key levels. Monitor mega-cap tech for potential further profit taking while small/mid caps lead broader market gains. Manage risk tightly using identified support levels and respect stops below demand zones.
Watchlist
Continuation: ODFL (S1: 177, S2: 176.5, S3: 176, R1: 178.5, R2: 179, R3: 180)
Anticipation: LEN (S1: 122, S2: 121.5, S3: 121.5, R1: 122.5, R2: 123, R3: 123.5)