Ocean shipping firm Matson, natural gas play Targa Resources, agricultural company Bunge, investment bank Raymond James Financial and pharmaceutical giant AbbVie are stocks to watch this week, as their relative strength lines hit new highs.
The RS line, the blue line just below the stock's price bars, compares a stock's price action to that of the S&P 500. A strong RS line in a struggling market is a positive sign.
Matson and Targa are also around buy points, while Bunge and Raymond James are rebounding from brief tumbles. AbbVie stock has held support at the 50-day line.
A few stocks are holding up in the current market correction. Nevertheless investors should be cautious, as the market indexes have been highly volatile and still trending lower.
Matson Stock
Honolulu-based Matson provides ocean transport with routes serving Hawaii, Guam, California, China and the South Pacific.
Matson has posted six straight quarters of earnings growth, the last four triple-digit gains. It has also reported five quarters in a row of revenue growth.
Port congestion has meant a boon for its expedited services throughout the pandemic. In Q3, EPS surged more than 300% to $6.53, while sales jumped 66% to 1.072 billion. Operating income in the third quarter skyrocketed to $377.9 million vs. $98.4 million in the year-ago period.
"The year-over-year increase in Ocean Transportation operating income in the quarter was primarily driven by continued strong demand for our expedited ocean services, including the new China-California Express," said CEO Matthew Cox in an earnings call.
Demand for Matson's services remains strong as companies struggle to restock inventories amid continued elevated consumption.
Earlier this month, Matson guided Q4 estimates sharply higher, spurring a bounce from the 50-day line and ultimate breakout.
Matson shares rose 4.9% to 98.09 in Friday trading, up 7.8% for the week. MATX stock is in buy range from a 93.27 cup-with-handle buy point. The buy range extends to 97.93.
Its relative strength line is trending upwards and at a new high, according to MarketSmith chart analysis. Its RS Rating is 97 out of a best-possible 99, while its EPS Rating is a top-notch 99.
Several other ocean shipping firms, including Zim Integrated Shipping.
Targa Resources Stock
Houston-based natural gas provider Targa operates mainly in the Gulf Coast, particularly in Texas and Louisiana.
In Q3, Targa's EPS bolted 400% to 80 cents, while revenue spiked 111% to $4.46 billion, as natural gas prices soared.
U.S. natural gas prices surged 10% on Friday, as the Northeast braced for frigid weather and winter storms. Earlier this month, the Southeast braved unusually cold weather. Meanwhile, the Russia-Ukraine crisis threatens to disrupt natural gas flows to Europe. That may also require more U.S. cargoes to Europe, tightening domestic supply.
TRGP stock edged up 0.4% to 57.95 on Friday, up 4.5% for the week. Shares are just below a 58.28 cup-base buy point. The chase zone extends to 61.19.
Targa's relative strength line is sloping upwards and near highs not seen since 2019. Its RS Rating is 98, but its EPS Rating is just 45, as Q2 earnings suffered a 57% year-over-year decline.
Bunge Stock
St. Louis-based Bunge is a global agribusiness company specializing in soybean exports, food processing, grain trading and fertilizers.
Bunge has reported four quarters in a row of revenue and earnings growth. In Q3, it posted EPS of $3.72, a 51% year-over-year increase. Sales popped 39% to $14.1 billion.
On Jan. 20, Bunge entered into an agreement to buy a 33% stake in Sinagro to strengthen its grain orientation strategy in Brazil. Bunge is among the largest traders moving Brazilian soybeans throughout the world. The commodity is used for livestock feed.
However, there has been investor pressure on Bunge to combat deforestation in the Amazon rainforest. As a result, the company has had to focus more resources on its ESG policies recently.
Bunge reports Q4 earnings before the market opens on Feb. 9. FactSet analysts expect Bunge earnings per share to decline 6% to $2.87, on a 21.5% increase in sales to $15.316 billion.
BG stock rose 1.7% to 98.19 on Friday, up 4.1% for the week. Shares are rebounding after briefly dipping below their 50-day line. Bunge stock is back above a 97.09 buy point that technically is invalid due to triggering the 7%-8% sell rule, but rebounded from those intraday losses to close well off that loss.
Bunge's relative strength line is rising. Its RS Rating is 93, and its EPS Rating is 93.
Raymond James Stock
Investment bank Raymond James Financial is rebounding from a brief slip below its 50-day line, as the Federal Reserve signals a rate hike in March.
Financial stocks get a profit-margin boost as interest rates rise. Brokerages like Raymond James can see an uptick in trading activity as well when interest income grows.
St. Petersburg, Fla.-based Raymond James has posted four straight quarters of earnings growth and five straight quarters of sales gains.
In the latest quarter, earnings per share popped 73% to $2.06. That followed two quarters of triple-digit increases. Fiscal fourth-quarter sales climbed 29% to $2.73 billion.
RJF stock gained 3.15% to 104.09 on Friday, continuing to bounce back after tumbling below a buy point in the prior week. That 103.56 buy point is technically no longer valid, but investors could use a bounce off the 50-day line as a possible aggressive entry.
The stock's relative strength line is ticking up and at a new high. Its RS Rating is 93, and its EPS Rating is 92.
AbbVie Stock
Drugmaker AbbVie has been posting record revenue, thanks to its medicines that treat cancer, hepatitis C and kidney diseases.
Its blockbuster drug Humira, which treats rheumatoid arthritis, accounts for more than 40% of its adjusted revenue last year.
Recently, it has also sought approval for other drugs too. AbbVie filed an application in December with the European Medicines Agency for approval to treat Crohn's disease patients with its Skyrizi treatment. Skyrizi is already approved for plaque psoriasis and psoriatic arthritis in Europe.
AbbVie's relative strength line is trending upwards near highs not seen since late 2019.
Its RS Rating is 95, and its EPS Rating is 93.
ABBV stock rose 1.4% to 137.92 on Friday. Shares have rebounded from the 50-day and 10-week line. That offers an early entry, while ABBV stock also has a 138.25 buy point from a three-weeks-tight pattern.
AbbVie earnings are due Wednesday, adding further risk to any buys.
