Materials has made another run toward resistance, although it’s pulling back this morning. As we noted in yesterday’s Sector Snapshot, the sector has rallied 8.7% from its 10/1 low into overbought territory, finishing yesterday just 1.3% below its 11/3 high. As shown below, rallies have repeatedly stalled near these levels since February, making this sector one to keep an eye on.
There’s been a big improvement in participation recently. In early October, none of the sector’s stocks were above their 50-day moving averages. That share has since climbed to 83.3%, the highest reading since 3/2, when it stood at 96.2%. After spending most of the spring and summer below 80%, Materials has finally moved back above that threshold, giving it its broadest participation in more than eight months as it approaches resistance again.
The individual stock returns show just how broad the rebound has been. Since the sector’s 10/1 low, 21 of its 24 stocks have generated positive returns, including 11 with double-digit advances. PPG Industries (PPG) leads with a gain of 19.4%, followed by Dow (DOW) with a gain of 17.9%, and CRH (CRH), up 17.8%. The gains extend across several industries, with packaging companies, construction materials producers, and industrial gas suppliers all represented among the leaders. At the other end, Albemarle (ALB) and Freeport-McMoRan (FCX) have gone hard against the grain, falling 8.6% and 10.3%, respectively.
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