Photographer: Michael Nagle/Bloomberg
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Thus far in 2024, all stock market lights are flashing green. January was up, and there has been a string of consecutive up months. There are four more days in February and it appears highly probable that February will be added to this list of bullish months by Friday. Daily, there have been a multiple number of new highs over new lows, confirming the seasonal and momentum indications. This next week benefits from the end-of-month bullish effect. The next likely short-term high is due on March 5th.
The communications services sector is top ranked for relative strength. It has been strong in the rankings for over a year. This sector has a shorter price history than most others, but the 16-month relative uptrend is clearly evident in the graph below. Further gains are likely.
Communications Services (XLC
XLC
) ETF Daily, Weekly, Monthly
This is the strongest sector.
Cycles Research Investments LLC
Within this area, Qualcomm
QCOM
is ranked second in the cycle/relative strength screen of the entire S&P 500. The company is in the development and commercialization of foundational technologies for the wireless industry. The weekly strip in the three-up graph below shows a reversal of a two-year absolute price downtrend and a 14-month downtrend in relative strength. The monthly momentum represented by the blue line reveals a stock that is not yet overbought. This is a rare find in this strong market. Over the last 32 years, the month of March has been the second strongest in any year. The stock is trading at a reasonable price earnings ratio of 22. The stock is likely to reach $180 over the next three months.
Qualcomm Daily, Weekly. Monthly
The stock is not overbought on a monthly basis-there is room to run on the upside.
Cycles Research Investments LLC
Qualcomm Monthly Histogram
March has been a strong month.
Cycles Research Investments LLC
Nordson Corporation manufactures, and markets products and systems to dispense and apply control adhesives, coatings, polymers, sealants, bio materials, and other fluids. Nordson
NDSN
is ranked sixth in the Cycles Research screen. The stock rallied during its last earnings release. This thrust broke the stock out of a range that can be seen in the weekly strip in the three-up chart below. The breakout points to a price target well over $300. The monthly histogram shows that the first six months in any year have been a strong time interval. The monthly cycle peaks in June, so it reinforces the seasonal cycle. Relative strength has been basing for three years.
Nordson Daily, Weekly, Monthly
The price breakout is evident in the weekly strip.
Cycles Research Investments LLC
Nordson Monthly Histogram
The first six months in any year have generated positive expected returns.
Cycles Research Investments LLC
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