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Chevron, Merck Lead Five Stocks Showing Strength In A Bad Market

Your stocks to watch for the week include five companies still doing well as the broader market falls: Dow Jones giants Chevron (CVX) and along with Merck (MRK), along with defense contractor Northrop Grumman (NOC), fertilizer giant Mosaic (MOS) and lithium producer Livent (LTHM).




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Markets have seesawed as investors try to gauge the impacts of rising interest rates and inflation. But some of those stocks, like Northrop, Mosaic and Chevron, have held up following Russia’s invasion of Ukraine, which has launched commodity prices higher and lifted expectations for defense spending.

Still, with the market in a correction, and the Nasdaq in a bear market, investors should be cautious about buying any stocks.

Northrop Grumman Stock

Northrop Grumman stock rose 0.4% to 468.70 in the stock market on Friday, soaring 6.7% for the week. Shares were in a cup-with-handle base with a 477.36 buy point.

NOC stock rebounded off its 50-day line earlier in the week. Investors could use a move above Thursday’s high of 470.23 as an early entry from the 50-day and from a trendline.

The stock’s relative strength line is at a nearly two-year high on a weekly chart.

The company, which makes the B-2 stealth bomber and other weapons and aerospace systems, last month reported mixed first-quarter earnings.

General Dynamics (GD), another defense contractor, was Thursday’s Stock of the Day. Lockheed Martin (LMT) was also a recent Stock of the Day.

“The world’s clearly changed with Russia’s invasion of Ukraine,” Lockheed CEO James Taiclet said on the company’s earnings call last month.

“A major global power has crossed a recognized international border to take territory by force and as a result, the value of strong deterrence to war as an instrument of nation’s geopolitical strategy has not been as great since the middle of the 20th century,” he continued.

Like the other stocks to watch here, Northrop Grumman has a strong Composite Rating. Its Composite Rating is 90. Its EPS Rating is 68.

Mosaic Stock

Mosaic stock fell 1% to 64.07 on Friday, just below its 50-day line. It’s even further below its 10-week line. So a break below recent lows could offer a sell signal, even as a powerful rebound could offer a buy signal.

MOS stock did rise 2.6% for the week.

Crop demand out of China and a spike in natural gas prices — a major input to make nitrogen fertilizer that spiked after Russia’s invasion — have driven fertilizer prices higher. Natural gas prices are much higher in Europe, giving U.S.-based nitrogen fertilizer makers an advantage. In addition, some nations have restricted exports on the plant nutrients in an effort to safeguard their own crop and food supplies, amid worries about shortages.

Mosaic this past week reported mixed first-quarter results, though profits surged 323%. But the company, which produces phosphate and potassium fertilizers, said the export restrictions and sanctions, along with farming and supply disruptions from the war, would lead to heightened demand for thinner supplies of crops and fertilizers.

“The strengthened crop prices, combined with global fertilizer industry supply constraints, have pushed nutrient prices higher,” CEO Joc O’Rourke said on the company’s earnings call. “In potash, sanctions against Belarus and uncertainty over Russian exports are having an impact on supply. Global prices have pushed higher as buyers look to secure adequate volumes.”

“The global phosphate market has also priced in uncertainty around Russian supply of both finished products and imports like ammonia and sulfur, though we are seeing some movement of Russian phosphates today,” he continued.

Mosaic stock has a 99 Composite Rating. Its EPS Rating is 79.

Chevron Stock

Chevron stock leapt 9% for the week to 170.78, rebounding above its 50-day line. Shares were in a flat base with a 174.86 buy point. Investors could buy CVX stock now off the 50-day line.

Shares have a best-possible 99 Composite Rating. Its EPS Rating is 77.

Chevron extracts oil from the earth and also runs refineries that turn it into gasoline and other materials. Rising oil and natural gas prices led to a huge jump in earnings and sales during Chevron’s first quarter, results of which were reported last month. Refining margins are huge, especially for diesel fuel, giving a big boost to integrated giants such as Chevron.

However, Chevron earnings per share came up short of expectations. Even as prices rise, the company said it expected lower production in the second quarter.

The oil and gas sector has been the market leader over the past several months. Rival oil major Exxon Mobil (XOM) is in a buy zone.

Merck Stock

Merck stock, rose 0.45% to 88.41 on Friday, is in a cup with handle base with an 89.58 buy point. The RS line is just below a 52-week high.

As with the other stocks to watch here, it has a Composite Rating in the 90s. That rating stands at 98. Its EPS Rating is also strong, at 93.

The stock jumped following its earnings late last month, briefly topping the buy point. Merck’s Covid pill helped lift results.

Merck stock is on SwingTrader.

Livent Stock

Livent stock dipped 0.4% to 28.02 on Friday, but skyrocketed 31% for the week. Shares were in a cup base with a 33.14 buy point.

Shares of the lithium-product maker jumped this week following its earnings and strong guidance. Prices for lithium materials used in electric vehicles have risen, as supply for those goods remains limited. The company said it expected pricing to remain at similar levels through the rest of the year.

The move higher for the stock put it above a trendline and, briefly, above short-term resistance at 28.32. In a better market, the stock might be more actionable. But investors could also wait for LTHM stock to form a handle, consolidating gains and offering a lower buy point.

Livent stock has a 98 Composite Rating and a 74 EPS Rating.

Lithium giant Albemarle (ALB) also reported booming earnings and raised guidance last week, giving a similar lift to ALB stock.

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