Investors have a wide variety of stocks to follow, as the market sprinkles pixie dust over some key industries. Oil stock Exxon Mobil (XOM), tech giant Alphabet-owned Google (GOOGL) and drugmaker Eli Lilly (LLY) are among the names to watch. Diversified management firm Ares (ARES) and infrastructure play W.W. Grainger (GWW) round out the group.
Russia’s Ukraine invasion has pushed energy prices higher on supply concerns. That’s bad news for consumers at the pump. But it’s also pushed up profits for oil and gas producers like Exxon Mobil and others. XOM stock and other energy plays are holding up well even with crude prices off March highs.
Pharmaceutical companies like Eli Lilly have benefited from the need for Covid vaccines and treatments, while the Biden administration’s huge spending bill improves the outlook for industrial suppliers like W.W. Grainger.
Holding a diverse portfolio of leaders reduces the risk of big losses in a particular stock or sector.
Irving, Texas-based Exxon Mobil found support at its 10-week line on March 15. XOM stock is just 2.9% above the 10-week line, well within range for a buying opportunity. Using this week’s 10-week line test, 80.83 would be the low end of the buy range, according to MarketSmith chart analysis. XOM stock could also consolidate and form a base in a couple of weeks.
Exxon Mobil’s stock fell slightly Thursday, after President Joe Biden said he would release some U.S. oil reserves to reduce pain at the pump for consumers, who are paying around $6 a gallon for gasoline in some states. Crude oil prices plunged 13% last week to below $100 a barrel.
Exxon Mobil is involved in worldwide exploration, production, transportation and sales of oil and natural gas. Its earnings have skyrocketed in recent quarters as demand for oil exploded following pandemic shutdowns. Demand continues to outstrip supply, as energy production can take months to get back online.
Exxon Mobil’s Q4 EPS surged to $2.05 from 3 cents a year earlier. And full-year 2021 EPS notched $5.38 vs. a 33-cent loss a year ago.
With most of its business segments on a solid path to profitability, Google, like fellow tech giants Amazon (AMZN) and Apple (AAPL), is aggressively buying back stock to accelerate returns to investors.
Google parent Alphabet disclosed on its Feb. 1 earnings release It plans a 20-for-1 split to take effect July 15.
GOOGL stock fell 1.1% to 2,803.01 last week, but found support at its 200-day line.
Google stock has an official buy point of 3031.03 on a daily chart. On a daily chart, shares are working on a handle, but it needs a couple more days for that to form. But GOOGL stock already has a tiny handle on a weekly chart, giving it a 2,875.97 buy point.
Google’s relative strength line is near all-time highs, but has been stalling recently. Its RS Rating is 83, while its EPS Rating is 96.
Eli Lilly Stock
The Indianapolis-based pharmaceutical giant is the maker of Iletin, the first commercially available insulin product to treat diabetes. It was also the first company to manufacture and globally distribute the polio vaccine.
Today Lilly is best known for clinical depression drugs Prozac and Cymbalta. However, its biggest revenue drivers are diabetes drugs Trulicity and Humalog.
In 2019, Eli Lilly took a big step into cancer therapeutics with its largest acquisition ever when it bought Loxo Oncology for $8 billion.
And on Feb. 11, the company said the Food and Drug Administration issued an emergency use authorization for its drug bebtelovimab, an antibody to treat the Omicron variant of Covid-19.
LLY is in range from a cup-base buy point of 284. Shares have been consolidating within the buy zone, forming a three-weeks-tight pattern. Investors could buy LLY stock now or with a little more strength to get above the bulk of its recent mini-consolidation.
Eli Lilly’s relative strength line is trending upward near multiyear highs. Its RS Rating is 93, and its EPS Rating is 89.
W.W. Grainger Stock
Illinois-based W.W. Grainger is a business-to-business distributor of maintenance, repair and operating products and services. It operates primarily in North America, Japan and Europe.
While infrastructure spending will surge, at least in the U.S., thus benefiting W.W. Grainger, inflation could become a challenge for its clients, who might be forced to scale back projects.
However, CFO Deidra Cheeks Merriwether said in an earnings call March 14 that Grainger’s “focus is to pass on cost inflation to our customers” to help protect profit margins.
“That’s the way our model works,” she said. “And so, we will continue to do that even if it starts to impact volume a bit.”
GWW stock is pulling back from a flat-base buy point of 527.16, after nearly hitting that entry on Thursday.
The company’s EPS and RS Ratings are both 89. Its relative strength line recently rose to a new high. GWW stock added 2.2% last week to 517.55.
Los Angeles-based Ares Management, which is also this week’s New America feature pick, invests in alternative assets. Ares’ total capital raised from new investors reached a record $77 billion in 2021.
ARES stock has a 90.18 official buy point. But getting above Tuesday’s high of 83.48 — which roughly coincides with some other short-term highs — would offer an early entry.
The company’s relative strength line is trending higher. Its RS Rating is 90, while its EPS Rating is 88. ARES stock gained 5% to 83.04 last week.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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