S&P 500 Index With % Stocks Above 40Day Moving Average Divergences (click to enlarge)
This chart shows the triangle-wedge formed in the S&P 500 Index. The battle between the 200 day and 50 Day moving average has finally given way to a move above the 50 day moving average. This would be more significant if were accompanied by greater volume and if the shorter term down-trend line were broken. It seems to be a waiting game until the Federal Reserve tips its hand next week to its intentions with regards to interest rates. This is the topic the market is obsessed with at the current time. It will not make a lot of difference if the Fed takes strong action and cuts rates, other than the comfort of putting a band-aid on the problem and giving the market some of same medicine that caused this situation.
The chart below shows the S&P 500 on a weekly time frame. It shows how significant sell-offs are worth looking into when they are accompanied by divergence in the % of stocks trading above their 40period moving averages. Some of the divergences are marked. These have proved to be profitable times to look for entries in strong stocks.
Below is a chart of the NYSE Composite Index with the advance/decline moving average in the top pane. This indicator is also worth watching to confirm short term bottoms in the market. With the Fed meeting coming up next week, it is a time that could cause more exaggerated moves in the market. It is a time to have a list of stocks that have diverged or performed better than the market in recent weeks, and look for these stocks if we get large sell off in the coming weeks.
NYSE Composite Index(click to enlarge)
One group that showed up on a scan of stocks closing with volume in the upper part of their daily range over the past few weeks, is a group of engineering companies referred to as Diversified Technology Services. These companies deal with sectors from the oil&gas industry, infrastructure, and defense aerospace. Below is a sample of these stocks.
JEC - Jacobs Engineering Group, Inc. provides technical, professional, and construction services to industrial, commercial, and governmental customers worldwide. It offers project services, including engineering, design, and architectural services. The company designs and engineers modern process plants, including projects for clients in the chemicals and polymers, pharmaceuticals and biotechnology, oil and gas, refining, food and consumer products, and basic resources industries; buildings, such as facilities in the health care, education, and criminal justice markets, as well as other buildings for clients in the private sector; infrastructure projects, including highways, roads, bridges, and other transportation systems, as well as wastewater treatment and similar facilities; technology and manufacturing facilities for clients in the aerospace, automotive, defense, semiconductor, and electronics industries; and pulp and paper plants. It also provides traditional field construction services, environmental remedial construction services, and modular construction technology services. In addition, Jacobs Engineering Group offers operations and maintenance services, such as management and support services, including subcontractors and other on-site personnel; and plant maintenance services. Further, it offers consulting services, such as performing pricing studies, market analyses, and financial projections in determining the feasibility of a project; performing gasoline reformulation modeling; analyzing and evaluating layout and mechanical designs; analyzing automation and control systems; analyzing, designing, and executing biocontainment strategies; developing and performing process protocols with respect to Federal Drug Administration-mandated qualification and validation requirements; and performing geological and metallurgical studies. Jacobs Engineering Group was founded in 1947 and is based in Pasadena, California.
This chart of JEC shows the strong inflows in the M1 indicator, and how this stock has performed exceedingly well in a choppy market.
KBR - KBR, Inc. operates as an engineering, construction, and services company supporting energy, petrochemicals, government services, and civil infrastructure sectors worldwide. It operates in three segments: Energy and Chemicals (E&C), Government and Infrastructure (G&I), and Ventures. The E&C segment engages in the design and construction of energy and petrochemical projects, including onshore and offshore oil and gas production facilities, such as platforms, floating production, and subsea facilities; pipelines; LNG and gas-to-liquids gas monetization facilities; refineries; petrochemical plants; and synthesis gas. This segment provides engineering, procurement, construction, facility commissioning, and start-up services, as well as program and project management, consulting, and technology services. The G&I segment delivers on-demand support services from contingency logistics and field support to operations and maintenance on military bases; and operates in transportation, waste and water treatment, and facilities maintenance sectors. It provides program and project management, contingency logistics, operations and maintenance, construction management, and engineering to military and civilian branches of governments and private customers. This segment also holds ownership interest in Devonport Management Limited, which owns and operates Devonport Royal Dockyard. Its shipyard operations business primarily engages in refueling nuclear submarines and performing maintenance on surface vessels for the U.K. Ministry of Defense, as well as limited commercial projects. The Ventures segment develops, provides assistance in arranging financing for, makes equity and debt investments in, and participates in managing entities owning assets generally from projects in which one of its other business segments has a direct role in the engineering, construction, and/or operations and maintenance. The company was founded in 1901 and is based in Houston, Texas.
The chart below of KBR shows similar strong inflows along with levels derived from the initial opening range. These levels should act as price targets and support levels.
FRM - Furmanite Corporation, through its subsidiaries, provides technical services in the United States, Europe, and the Asia-Pacific. Its Technical Services segment offers online repairs of leaks in valves, pipes, and other components of piping systems and related equipment used in flow-process industries; and on-site machining, bolting and valve testing, valve repair, product distribution, heat treating, and repair on such systems and equipment. This segment also offers hot tapping, fugitive emissions monitoring, passive fire protection, concrete repair, heat exchanger design, manufacturing, and repair, as well as diagnostic services on valves and motors. It serves petroleum refineries, chemical plants, offshore energy production platforms, steel mills, nuclear power stations, conventional power stations, pulp and paper mills, food and beverage processing plants, and other flow-process facilities. The company's Government and Other Services segment offers information technology and other services to the government contracting industry. It provides services that support research, program and policy analysis, program implementation, and program evaluation in a range of focus areas, including early childhood education and development, and children, youth, and family services. This segment also offers research studies and services, training and technical assistance, conference and event management logistical support services, grant review services and support, and tailored solutions in Web site development and graphic design. In addition, its research services include evaluation, survey development, data collection, primary and secondary data analysis, report preparation, training, and technical assistance. The company was founded in 1952. It was formerly known as Kaneb Services, Inc. and changed its name to Xanser Corporation in 2001. Later, it changed its name to Furmanite Corporation in May 2007. Furmanite Corporation is headquartered in Richardson, Texas.
Below is the chart of FRM, it shows that is stock attracted significant attention back in May when volume and M1 strongly advanced.
URS - URS Corporation operates as an engineering design services company in the United States and internationally. It provides a range of professional planning and design; systems engineering and technical assistance; program management; construction management; and operations and maintenance services to the U.S. federal, state, and local government agencies, as well as private industry and international clients. The company's planning and design services include master planning; land-use planning; transportation planning; technical and economic feasibility studies; environmental impact assessments; analysis of alternative designs; and the development of conceptual and final design documents for the construction of new transportation projects and for the renovation and expansion of existing transportation infrastructure, as well as for schools, courthouses, hospitals, corporate offices, and retail outlets. It offers systems engineering and technical assistance to various branches of the U.S. military for the design and development of new weapons systems, and the modernization of aging weapons systems. The company also provides construction management services, including cost and schedule management, change management, document control, contract administration, inspection, quality control and quality assurance, and claims and dispute resolution services for transportation, facilities, environmental, and water/wastewater projects. URS Corporation's program management services include logistics planning, acquisition management, risk management of weapons systems, safety management, and subcontractor management services for military programs. In addition, it provides operations and maintenance services in support of military and other non-military installations and operations. The company was founded in 1904. It was formerly known as Broadview Research Corporation and changed its name to URS Corporation in 1974. URS Corporation is headquartered in San Francisco, California.
The URS chart blow also shows significant attention the last few months with money flows and increased volume.
ACM - AECOM Technology Corporation and its subsidiaries provide professional technical and management support services to government and commercial clients worldwide. It operates in two segments, Professional Technical Services and Management Support Services. The Professional Technical Services segment offers consulting, planning, architecture, engineering, construction management, project management, asset management, environmental services, and design-build services. Its services are used in various areas and industries, including transportation infrastructure; research, testing, and defense facilities; water, wastewater, and other environmental programs; land development; security and communication systems; institutional, mining, industrial, and commercial and energy-related facilities. The Management Support Services segment provides infrastructure management and maintenance, training, logistics, consulting, technical assistance, and systems integration services primarily for agencies of the United States government. This segment's clients consist primarily of national governments; state, regional, and local governments; public and private institutions; and corporations. The company, formerly known as Ashland Technology Corporation, was founded in 1980 and is based in Los Angeles, California.
ACM news from September 12th, Bank of America holds a 20.68% stake.