The U.S. January Consumer Spending report released this morning confirmed that U.S. consumers continue to spend money. Spending rose another 0.3% versus an increase of 0.2% in December. Consumer Discretionary SPDRs (NYSE:XLY) – $30.79, that track the S&P Consumer Discretionary Index, are responding by breaking above resistance to reach a 17 month high. Current intermediate upside technical potential is $33.10.
According to Thackray’s 2010 Investor’s guide, seasonal influences for the sector are positive until April 23rd.
Stocks in the sector that broke above resistance this morning included Black & Decker (NYSE:BDK) – $74.01 and Stanley Works (SWK – $58.14)
Bank of Montreal (TSE:BMO) – $56.24 touched a two year high this morning in anticipation of its first quarter earnings report to be released tomorrow. Consensus is $1.03 versus $1.07 per share last year. Better than expected first quarter earnings reports released last week by Commerce Bank and National Bank were greeted favourably by the market and investors are guessing that other major Canadian banks also will beat consensus. Seasonal influences for the sector are positive between the end of February and the end of May.
Other S&P 500 stocks breaking resistance this morning included Agilent (A), Cardinal Health (CAH), Eaton (ETN), Hospira (HSP), ITT Industries (ITT), Mead Johnson (MJN), Rowan Companies (RDC), Verisign (VRSN and Xerox (XRX).
No S&P 500 stocks broke intermediate support levels.
Comments offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. An attempt to provide accurate data has been made, but accuracy is not guaranteed.
Don Vialoux is a research analyst for JovInvestment Management Inc. All of the views expressed herein are the personal views of the author and are not necessarily the views of JovInvestment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by JovInvestment Management Inc
Don Vialoux, chartered market technician, is the author of a free
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