There have been several stocks benefiting from the Trump rotation equity markets have seen over the last couple of weeks. The Trump rotation is the flow of funds into financials, industrials and healthcare stocks from investment grade corporate bonds, government bonds and consumer discretionary names. I think that some of the selling in consumer discretionary as well as other stocks like those in FANG, is a bit overdone. But you still can’t deny the fact that there’s been a huge rally that doesn’t show signs of reversing anytime soon.
Today’s Bull of the Day is a stock that’s in the metals manufacturing business. Worthington Industries (WOR) focuses on value-added steel processing and manufactured metal products in the US. The company operates through Steel Processing, Pressure Cylinders, Engineered Cabs, and Other segments.
The stock is a Zacks Rank #1 (Strong Buy) mostly because two analysts have increased their earnings estimates for the current quarter and current year. The bullish attitude has made a significant impact on our Zacks Consensus Estimate for both those time periods. We’ve seen the current quarter consensus rise from 60 cents to 74 cents, while the current year number has gone from $2.65 to $3.21.
Looking at a chart, you can see that this stock has been on a huge move dating back to January of this year when shares traded in the mid-$20s. The most recent move from $45 to $58 took only 8 trading days. The technical setup approaching this move was textbook. Shares came down to test the -50-day moving average as the commodity channel index went to oversold below -100. The buyers stepped in, kicking off a small rally which was then confirmed by a “Buy” single from the commodity channel index as it moved up through the zero line. From that signal, momentum kept on building. Now the CCI is overbought at 90. I’d be looking for a reversion to near the zero line to enter in a new trade.
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