Infrastructure (CBI)

Click charts to enlarge

The chart at the top shows the recent breakout in infrastructure stock Jacob's Engineering (JEC), which reported a strong quarter this morning. It broke through both its 100dma and its resistance line simultaneously a few days ago. The chart below it is a chart of Chicago Bridge and Iron (CBI) which looks like it is on the verge of breaking its 100dma and its resistance line very soon.

This is another fun trade where one should not bet the farm, despite the strong underlying fundamentals in this sector. It is important to remember that the S&P itself has yet to break out above resistance at 1395/1400, and that the Dow is only about 300 points away from its 200dma and 1,000 points away from support at 11700.

It seems that in order to be making any real money in this market, one needs to be in potash based fertilizer stocks, steel, or energy (coal or oil).

Any aggressive buy in the potash space should be hedged ahead of POT's report this Thursday.