First quarter earnings season starts this week, with Delta Air Lines Inc. (DAL) reporting in Thursday’s pre-market session. The stock closed at a two-month high on Friday, despite well-publicized Omicron-induced travel disruptions. Traders and investors are looking beyond the next month of soaring infections and into the summer travel season, in which massive herd immunity could finally put the COVID pandemic in the rear view mirror.
Dow component Coca-Cola Co. (KO) and other dividend payers have roared out of the gates in 2022, marking a widespread rotation into equities that can withstand high inflation. Barron’s magazine noted this trend over the weekend, highlighting Coke’s bullish outlook after sub-par 2020 and 2021 stock performance. Of course, these sleepy plays aren’t for everyone but a little exposure in a long-term portfolio goes a long way toward getting a good’s night sleep during market downdrafts.
2021’s top-performing tech stocks have been sold aggressively so far this year, highlighting a market tendency for one year’s big winners to become the next year’s big laggards. Dow component Microsoft Corp. (MSFT) could defy this trend, with strong cloud division growth expected to continue into 2023. Buying signals haven’t gone off yet for Mr. Softee but the pullback is slowly approaching support near 300 that could offer a low risk buying opportunity.
Shiba Inu (SHIB) has had a tough time since an oversold bounce ended at 0.00004000 on Christmas Eve, shedding more than 30% while breaking short-term support at 0.00002820. Bears could retain control for the next few weeks but there is a potential light at the end of the tunnel because the decline is approaching strong support at the 200-day moving average at 0.00002400, which has narrowly aligned with the .786 Fibonacci retracement of the September into October rally wave.
SPDR Select Sector Utilities ETF (XLU) posted the third highest ETF volume on Friday, bouncing at 69 after a 5-day pullback. The fund has spent the last month testing resistance at the February 2020 high at 71.10, with a breakout setting the stage for the strongest gains since 2019. Natural gas prices haven’t risen at the same rate as other fossil fuels and many of these companies generate power through water, nuclear, and other cheap energies, making them less vulnerable to rising commodity prices.
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Disclosure: the author held Coca-Cola in a family account at the time of publication.