On Monday morning, President Trump announced plans to impose 25% tariffs on steel and aluminum imports — a sweeping policy move that’s certain to reshape the Materials sector. While this can negatively affect several industries, domestic steel producers are likely to benefit from increased demand.

How Markets Reacted to the 25% Tariff Announcement

The StockCharts MarketCarpets provides a clear visual of how investors reacted when the tariff announcement made headlines.

FIGURE 1. MARKETCARPETS VIEW OF THE MATERIALS SECTOR. Notice the top gainers consist of domestic metals producers.Image source: StockCharts.com. For educational purposes.

The stocks that gained the most following the announcement were Steel Dynamics, Inc. (STLD) and Nucor Corporation (NUE), both domestic steel producers, as well as Newmont Corporation (NEM), a mining company focused on gold and copper extraction.

The surge in STLD and NUE reflects investor expectations that tariffs will curb foreign competition, allowing US steelmakers to raise prices and expand market share. NEM also gained, likely due to broader market concerns over trade tensions and inflation. On top of this, copper — a key industrial metal — could see supply chain shifts or price fluctuations, depending on how tariffs impact global trade flows.

Let’s take a longer-term look at these stocks relative to the Materials sector and the broader market (S&P 500). Below is a PerfCharts view of their relative performance over the last year.

FIGURE 2. PERFCHARTS OF THE S&P 500, XLB, STLD, NUE, AND NEM. Though NEM outperformed, the other stocks and the Materials sector underperformed the broader market.Chart source: StockCharts.com. For educational purposes.

Global steel production decreased in 2024. So it’s no surprise that the Materials Select Sector SPDR Fund (XLB), our sector proxy, underperformed the S&P 500, and that many steel producers and miners would also underperform the broader market and sector. Interestingly, NEM outperformed the S&P 500, XLB, STLD, and NUE in 2024 due to surging gold prices, strong financial performance, increased gold production, and free cash flow.

Still, if the new tariff environment remains unchanged, then NEM and especially STLD and NUE may have plenty of room to run. Let’s take a look at the sector and all three stocks to see if there are any present trading opportunities.

Let’s start with XLB. Take a look at a 5-year seasonality chart of XLB to get some context.

FIGURE 3. 5-YEAR SEASONALITY CHART OF XLB.  Sector performance tends to follow a cyclical pattern, with March, July, and November historically seeing the highest close rates and average gains.Chart source: StockCharts.com. For educational purposes.

Geopolitical shifts under the new administration will likely reshape seasonal trends. Nevertheless, historical context remains valuable. Over the past five years, March has been XLB’s second-strongest month, with a 75% higher-close rate and an average gain of 4.8%. That’s the seasonality picture.

Now, let’s look at the price action from a longer-term trend perspective. Below is a weekly chart of XLB.

FIGURE 4. WEEKLY CHART OF XLB. While the Materials sector has lagged behind the S&P 500, it’s been trending upward nevertheless.Chart source: StockCharts.com. For educational purposes.

This five-year chart shows XLB underperforming the S&P 500. If you go back a few decades, this negative performance has been steady. Yet XLB, due to overall market growth, inflation, and sector-specific cycles, has been trending up in absolute terms.

Demand for materials is cyclical, and the Materials sector Bullish Percent Index ($BPMATE), a breadth indicator, illustrates this clearly. Currently, the BPI is moving upwards, with 31% of stocks within the sector flashing Point & Figure buy signals. Typically a crossover from below to above 30% would issue a bull alert; a move above 50% would strongly favor the bulls, signifying that buyers have the edge. Understanding XLB’s broader trend helps contextualize whether the stocks within the sector are moving with or against the sector’s trend relative to their trajectories.

Let’s look at the daily chart of NEM.

FIGURE 5. DAILY CHART OF NEM. Is it a new bullish trend or a bear rally?Chart source: StockCharts.com. For educational purposes.

NEM is attempting to recover from a steep selloff that began in October. The key question is whether the bullish reversal signals the start of a robust recovery or a temporary bounce within a sustained downtrend.

To gain insight into this question, let’s examine a couple of indicators: one that measures momentum and another that analyzes volume. Volume-wise, the Accumulation/Distribution Line (ADL) plotted behind the price shows strong money flow into the stock, its buying pressure supporting NEM’s recovery. The Commodity Channel Index (CCI) is showing strong bullish momentum, yet indicates that NEM may be sailing into overbought conditions.

The key levels to watch are near the top line (Leading Span B, red cloud) and the projected bottom line (also the Leading Span B, but in the green section) of the Ichimoku Cloud. If price declines at or near the top, but bounces at the bottom, the bullish reversal thesis remains intact, signaling a potential early buying opportunity for those looking to get into the stock. If prices fall below the bottom level, the downtrend is likely to resume.

Now let’s look at the domestic steelmakers on the list, starting with a weekly chart of STLD.

FIGURE 6. WEEKLY CHART OF STLD. The stock price looks like it’s in a volatile ascent.Chart source: StockCharts.com. For educational purposes.

I’m highlighting a weekly rather than a daily chart for two reasons: First, you can’t see the larger (trend) context on a daily chart, and second, the key levels are just as apparent in the weekly as in the daily chart.

Over the last six years, of which the last three are shown on the chart, STLD has been trending upward with increasing volatility. Steel production in the US may have decreased significantly in 2024, yet STLD prices continue to cumulatively rise. This trend underscores the inherent cyclicality of the steel industry, as evidenced by the fluctuating prices.

NOTE: Although “seasonality” and cyclicality can be related, the latter refers more to macroeconomic, industry, and supply-demand shifts. These typically drive fluctuations in a manner that gets smoothed out in seasonality charts. So, when I use the term “cyclicality,” I’m referring to these fluctuations before them being “averaged out” in a seasonality calculation.

The ZigZag line illustrates the major swing highs and lows that define the trend, as well as key support and resistance levels. If STLD’s uptrend were to maintain its trajectory, price must stay above the swing low level slightly above $110 (see magenta line) and eventually break above resistance at the most recent swing high at $155. Given this is a weekly chart, it may take months to play out (assuming the longer-term uptrend sustains itself).

Note, however, that the selling pressure appears to be the dominant driver for near-term volume, according to the Chaikin Money Flow (CMF). If volume precedes price in this particular instance, then a pullback may be imminent.

Last, but not least, take a look at a daily chart of NUE.

FIGURE 7. DAILY CHART OF NUE. The stock is in a downtrend and all the indicators spell a bear rally.Chart source: StockCharts.com. For educational purposes.

NUE may have jumped 6.24% on Monday, but what are investors rushing into? While Trump’s 25% tariffs on steel and aluminum imports are likely to boost domestic steel producers, NUE is amid an arguably robust downtrend.

Its response to the 61.8% Fibonacci Retracement (drawn from the December high to low) isn’t promising either, making the recent surge look more like a bear rally than a bullish trend reversal. Additionally, the CMF has remained largely negative, dipping well below the zero line and recently crossing it again, indicating that selling pressure continues to dominate.

However, there are shoots of hope, as NUE appears to be rising against the broader Dow Jones U.S. Iron & Steel Index ($DJUSST) of which NUE is a component (see magenta line). If NUE stays above the $115 level (the most recent swing low), then such a level may signal a bottom. Of course, you’ll want to make sure that volume and momentum support are aligned with this potential reversal.

At the Close

If you’re bullish on U.S. steel producers, consider adding these stocks to your ChartLists, keeping a close watch on the MarketCarpets Materials sector view, and staying informed on industry news. With these tools and insights, you’re likely to spot a market opportunity.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

While 2024 was defined by the strength of the Magnificent 7 stocks, 2025 has so far been marked by a significant change of character on many of these former high flying growth names.  And while most remain in constructive long-term patterns, the short-term changes make me skeptical of further market upside without the support of these mega cap players.

Let’s group these charts into three buckets: the top performers, the broken charts, and the diverging darlings.

The Top Performers: META and NFLX

This first bucket features two stocks that are moving higher in 2025 just like they did for much of 2024.  While the remaining stocks on this list have experienced some change of character, these are the names that remain in consistent uptrend phases.

Both Meta Platforms (META) and Netflix (NFLX) have achieved new all-time highs in February, with strong earnings calls serving as the latest catalyst for price appreciation.  Both charts remain above upward-sloping 50-day moving averages, and as long as they continue to make higher highs and higher lows, they should be considered innocent until proven guilty.

The Broken Charts: TSLA, AAPL, MSFT, and NVDA

2025 has been much less kind to this second group of “Formerly Magnificent 7” names, as all four of them have pulled back from a strong 4th quarter performance.  Apple (AAPL) in particular strikes me as a chart that is demonstrating a potentially catastrophic bearish price pattern, with a clear “line in the sand” to monitor in the coming weeks.

After rising to a new all-time high around $260 in late December, AAPL pulled back to find support at the early November low around $220.  While the stock has bounced higher after that sudden 16% drop, a bearish engulfing pattern at the 50-day moving average at the end of January reinforced that this is a name most likely in a distribution pattern.

Now we have clear neckline support at the previous swing lows around $220.  If AAPL is able to hold this support level, then we’d label this a consolidation phase and wait for further clarification.  But if the $220 level is finally broken, that would complete a topping pattern and also represent a break of the 200-day moving average.  A quick measurement would suggest a downside target around $190, representing a 27% drop from the December 2024 high.

The Diverging Darlings: AMZN and GOOGL

Now we’re left with two stocks that both feature a bearish momentum divergence, a pattern that has proliferated among US stocks in recent months.  When prices make new highs on strong momentum, that suggests a healthy uptrend phase.  But when prices make new highs on weaker momentum, this bearish divergence indicates a lack of upside follow-through and a high likelihood of a market top.

While Amazon.com (AMZN) still remains above two upward-sloping moving averages, the early February high is marked by a downward-sloping RSI.  This bearish pattern could easily be negated if AMZN is able to achieve further highs on improving momentum.  But the divergence looks very similar to other stocks that have experienced major tops.

In fact, Alphabet (GOOGL) featured a bearish momentum divergence going into last week’s earnings release.  And while that certainly put GOOGL on a “red flag” watch list for me, the gap lower and subsequent post-earnings drop tells me that investors are questioning the long-term bull story for this former leadership name.

Similar to the AAPL chart, I would argue that the 200-day moving average could be the most important level to watch.  A pullback to the 200-day moving average after an earnings miss could represent a decent retracement to set the stage for the next big move higher.  But if stocks like AAPL and GOOGL fail to hold that the 200-day moving average, what would that tell us about investors’ risk appetite in February 2025?

To be clear, very few of the Magnificent 7 stock look truly negative from a long-term perspective, with most of them still within close proximity to a recent all-time high.  But given how many of these former leadership names have experienced at least initial breakdowns from their recent highs, I’m starting to look elsewhere for opportunities on the long side.

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

In this exclusive StockCharts video, Joe shows how the 4-day moving average can be useful especially in volatile markets. He explains the advantages of using it in conjunction with the 18-day MA to prevent buying at the wrong time and highlighting when good opportunities appear. He then goes through the commodity charts and shows the improvement taking place. Finally, Joe dives into the symbol requests that came through this week, including ASAN, FTV, and more.

This video was originally published on February 12, 2025. Click this link to watch on Joe’s dedicated page.

Archived videos from Joe are available at this link. Send symbol requests to stocktalk@stockcharts.com; you can also submit a request in the comments section below the video on YouTube. Symbol Requests can be sent in throughout the week prior to the next show.

Intel’s stock price has struggled for most of 2024, even as most of its semiconductor cousins were thriving. Why pay attention to Intel Corp. (INTC) now?

The stock showed up on my StockCharts Technical Rank (SCTR) scan, which is a good enough reason to analyze the stock. The scan is provided at the end of the article.

Vice President JD Vance emphasized the increase in US AI systems manufacturing in the AI summit in Paris. Since Intel is the largest domestic AI chip producer, the stock price got a much-needed boost. gave INTC a boost.

Previously, INTC has been beaten down hard. Weak earnings didn’t help, and the stock has been acting like a sinking ship with no lifeboat since the second half of 2024 (see chart below). But things may be shifting as it looks like the lifeboat may have appeared, bringing the stock a little closer to the surface.

The daily chart of INTC stock below gives a good picture of the price action.

FIGURE 1. DAILY CHART OF INTEL STOCK. The stock has closed higher for four consecutive days. It’s now hitting its first resistance against the 200-day moving average. Look for a breakout off of this level.Chart source: StockCharts.com. For educational purposes.

Note the following points in the chart:

• The stock price has risen for four consecutive days with increasing volume.
• Thursday’s close is battling against its 200-day simple moving average (SMA) resistance.
• The SCTR score has crossed above the 76 level, the first criterion of my scan.
• Intel’s relative performance (price relative/relative strength) against the VanEck Semiconductor ETF (SMH) is now in positive territory (13.02%).
• The moving average convergence/divergence (MACD) has crossed above its signal line and moved above zero.

With all the positive technicals, does it mean INTC stock is a buy at these levels? A break above the 200-day SMA would check one box. Beyond that, I would look at the November 2024 high (see weekly chart below).

FIGURE 2. WEEKLY CHART OF INTC STOCK. After a steep fall in mid-2024, Intel’s stock price is showing signs of recovery. A break above its early November high would be the first sign of a move higher.Chart source: StockCharts.com. For educational purposes.

A break above this high could mean that INTC could float toward its 52-week high. However, there are resistance hurdles to cross — the July 2024 high and January to March 2024 consolidation — before reaching the December 2023 high.

The bottom line: I’ll be monitoring Intel’s stock price closely. I’ve set an alert to notify me when the stock price crosses $26.25. If the indicators in the daily chart still indicate buying pressure is still strong and the trend is bullish, I’ll consider adding INTC to my portfolio.

SCTR Scan

[country is US] and [sma(20,volume) > 100000] and [[SCTR.us.etf x 76] or [SCTR.large x 76] or [SCTR.us.etf x 78] or [SCTR.large x 78] or [SCTR.us.etf x 80] or [SCTR.large x 80]]

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Not everyone likes to take a contrarian stance. Most people prefer to move with the market, not against it. But for those who thrive on going against the grain, extreme market movements — whether a rally or selloff — present opportunities.

Wednesday morning was one of those sessions. The Consumer Price Index (CPI) report came in hotter than expected, sending markets into an early plunge before trading mixed later in the day. This presented an ideal opportunity to hunt for stocks that might be bottoming.

My first move was to check the StockCharts’ Advancers & Decliners tool on my Dashboard for a real-time picture of market activity.

FIGURE 1. ADVANCERS & DECLINERS TOOL SECTORS VIEW. The hardest hit were Real Estate and Utilities.

The Real Estate and Utilities sectors were the most affected in the early part of the trading day. I needed a second angle to view the sector action. So, I switched over to the Sector Summary tool.

FIGURE 2. SECTOR SUMMARY TOOL. Percentage-wise, real estate had lost the most at the time of viewing.

After deciding to focus on the Real Estate sector, I ran a bearish New 52-Week Lows scan to see what I might find.

FIGURE 3. IMAGE OF SCAN PAGE AND RESULTS.  I found two homebuilder stocks: DHI and LEN.

DR Horton Inc. (DHI) and Lennar Corp. (LEN), two of the biggest US homebuilders, were making new 52-week lows.

Full transparency: If you notice the super-low SCTR scores, well, they’re making new 52-week lows … and I’m searching for a bottom, not only price-wise, but in terms of a turnaround from extreme technical weakness.

But how were they compared to their industry peers? To analyze their relative performance, I switched over the PerfCharts to get a comparative view, adding SPDR S&P Homebuilders ETF (XHB) as an industry proxy in addition to a third major homebuilder—Toll Brothers, Inc. (TOL). TOL wasn’t on the list, but, as one of the major homebuilders showing relative strength despite its decline, I included it for comparison.

FIGURE 4. PERFCHARTS COMPARING XHB, DHI, LEN, AND TOL. TOL is the only stock outperforming its industry peers.

TOL is the only stock outperforming its peers, with LEN and DHI leading XHB downwards.

Back to my objective, I’m looking for stocks within the industry that might be close to bottoming out. But before I can do that, I must assess whether the industry might be bottoming out and if the current market response to the newly released CPI figures may be overextended or justified by underlying valuations.

Below is a five-year weekly chart of XHB.

FIGURE 5. WEEKLY CHART OF XHB. The index topped, but will it bounce or continue its decline?

If you look at XHB’s rising prices from the beginning of 2024 through October, in contrast to the Relative Strength Index’s (RSI) decline from above the 70 threshold, the bearish divergence is clear, confirming XHB’s topping action. The RSI is below the 50-line but nowhere near oversold territory. 

Looking at sector breadth, the Real Estate Bullish Percent Index (BPI) is currently favoring the bulls, as over 50% of stocks within the sector are triggering Point & Figure “buy” signals. Although homebuilders don’t appear to be participating in this rally, will the broader sector eventually help lift the industry (in other words, are homebuilders bottoming)?

The critical level to watch here is $97 to $101 (see blue highlight), two swing lows that should serve as technical support. To broaden the viable support range, I overlaid an Ichimoku Cloud. If XHB falls below either the swing low or the cloud, then, technically, there’s plenty of downside to go. If it bounces, then a bullish case might take shape.

With this in mind, look at all three stocks (TOL, LEN, and DHI) side by side.

FIGURE 6. ACP CHARTS OF TOL, LEN, AND DHI.  TOL, the better-performing stock, is nearing a critical support level.

The blue horizontal lines in each chart mark recent swing lows, all of which are (or were) critical support levels. TOL is about to test that level, while LEN and DHI have already fallen below theirs.

Here’s a daily chart of TOL.

FIGURE 7. DAILY CHART OF TOL. Watch how price responds to these two support levels.

TOL is nearing support at the $120 December swing low. A closer look at the RSI reveals a slight bullish divergence, with the indicator rising from the 30-line even as TOL briefly dips below $120 before staging a strong bounce. Meanwhile, the Chaikin Money Flow (CMF) has fallen into negative territory. However, this dip is less pronounced than in December, when TOL’s price may have formed a bottom.

If TOL closes below $120, the more critical support level is $110. This is the longer-term support level shown in the weekly chart. If TOL remains above this threshold and proceeds to advance, then it’s likely that a bottom may be in place. Check volume and momentum to confirm the reversal if or when it happens.

Next, take a look at this daily chart of DHI.

FIGURE 8. DAILY CHART OF DHI. I’m using a measured move approach to determine where it might find support before the next swing low.

If you reference the weekly charts in Figure 6, you’ll see that DHI had fallen below critical support at $135 and is still falling. The next major level of support would be the October 2023 low at $100. However, given the near-symmetry of each swing, you might expect DHI to bounce at the “measured move” level near the $118 range.

The CMF is well below the zero line, indicating that selling pressure is driving the stock’s decline. However, the RSI presents a bullish divergence, with its recent lows trending higher even as the stock continues to fall. Still, without a definitive bounce and a shift in the CMF — a key volume indicator — there’s no clear confirmation that a bottom is in place.

Lastly, let’s switch over to a daily chart of LEN.

FIGURE 9. DAILY CHAFT OF LEN. In the near term, there’s no support in sight.

The next support level for LEN may be the November 2023 low of $101. In the near term, however, there doesn’t seem to be much in sight to prevent LEN’s descent. That said, a few volume-based signals suggest the selling pressure may not be entirely one-sided.

• The Accumulation/Distribution Line (ADL), shown rising above the current price (see green line), indicates that money flows are increasing; a bullish sign for LEN.
• The volume of selling pressure, according to the CMF, is significantly easing.
• The Money Flow Index (MFI), which tracks volume and momentum, is climbing even as LEN continues to decline, indicating a bullish divergence.

While there’s no sign of bottoming, you may want to continue monitoring the stock for signs of stabilization.

At the Close

This piece demonstrates an attempt to spot bottoming opportunities during Wednesday’s market selloff. By tracking sector performance with StockCharts tools—namely, Advancers & Decliners and Sector Summary—I spotted Real Estate as one of the hardest-hit areas. A New 52-Week Lows scan flagged LEN and DHI, which I compared to TOL using PerfCharts to gauge relative strength. While these stocks haven’t confirmed a bottom yet, there are hints of a shift.

It’s worth adding LEN, DHI, and TOL to your ChartLists and keeping an eye on them. Once they stabilize and bottom out, it could signal an early entry point well before the next uptrend takes shape.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.