Chart of the Day: Bouncing Around Following a Steep Drop
This stock is trying to carve out a base but the market may not be helpful.
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The tariffs were announced Wednesday and reflexive action from the markets was a definitive response — down. Yet, we are only back to levels from a couple weeks ago, and if they hold then buyers are likely to come back. We are in a bullish seasonal trend and while that is more calendar-related, it might mean buyers will overlook issues to start piling back into stocks.
No question Vulcan Materials VMC has been hit hard. The 25% drop in February was on strong turnover, with big money managers cutting loose the stock as it appeared the tariff trainwreck would do some damage. It was a "shoot first, ask questions later" scenario by big money managers. However, the stock has value and it may be in the low $200's area where Vulcan finds buyer support.
The stock has been trying to build a base for weeks, and while it may take much longer to convince big money to come back in, we're confident. The indicators show a series of higher lows in the chart, which is a good start. Stochastics (momentum) is starting to turn up and money flow is back in the positive.
We like Vulcan Materials and rate it a One in TheStreet Pro Portfolio.
At the time of publication, TheStreet Pro Portfolio was long VMC.
