Stocks continued their post-Fed rally on Thursday in the wake of that dovish “no hike” policy decision from the Federal Reserve on Wednesday that also saw policymakers cut their rate hike forecast for 2016 in half. Now, officials only expect two quarter-point hikes this year.
The Dow Jones Industrial Average is rapidly moving towards two-year resistance near the 18,000 level. A breakout would get the seven-year bull market — which hasn’t made a new high since early last year — back on track.
If that’s going to happen, watch for fresh strength in energy stocks and precious metals, as the Fed’s actions have weakened the dollar and put a bid under commodities on higher inflation expectations. Here are three charts to keep an eye on: Exxon Mobil Corporation (NYSE: XOM), Goldcorp Inc. (USA) (NYSE: GG), and Newmont Mining Corp (NYSE: NEM).
Exxon Mobil Corporation (XOM)
With crude oil topping the $40-a-barrel level on Thursday to return to levels not seen since December, energy stocks like XOM are getting a nice lift here. XOM has been setting higher lows since last August but has yet to break over resistance near $86 last tested in May. With the Fed promising lower interest rates for longer, now could be the time.
The company will next report results on April 29 before the bell. Analysts are looking for earnings of 25 cents per share on revenues of $52.7 billion.
Goldcorp Inc. (USA) (GG)
Gold and silver have been on the move again this week as the dollar has weakened, sending shares of GG up to test levels not seen since last June. That’s worth a near-80% move from the January low. But with precious metals looking to end a long downtrend that started in 2011, this could just be the start of a period of sustained gains.
The company will next report earnings on April 28 before the bell. Analysts are looking for the company to break even on revenues of $941 million.
Newmont Mining Corp (NEM)
Another precious metals play, NEM, is showing just how significant the recent strength in the sector has been. Shares are on the verge of breaking up and out of consolidation resistance going all the way back to 2013 — a move that would put early 2013 levels near $40 back in play, a move of near 50% from current levels.
The company will next release results on April 20 after the bell. Analysts are looking for earnings of 14 cents per share on revenues of $1.86 billion.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
