As the S&P 500 continues to rally off of its Christmas Eve low, many stocks have extended well past their 50-day moving averages.  Below is a list of the 30 S&P 500 stocks that are trading the furthest above their 50-DMAs.  At the top of the list is Coty (COTY) which currently sits 44.18% above its 50-DMA.  Before reporting earnings on February 8th, the stock actually sat just below its moving average, but a strong report rocketed the stock well above its 50 and 200-day.  While no other stocks are quite as overextended as COTY, there are currently nine that sit more than 20% above their 50-DMAs.  Many of these saw a strong Q4 earnings report, like Xilinx (XLNX) which reported a triple play and gapped up 9.55% in reaction to the news.  Other notables on the list of most extended stocks include Chipotle (CMG), Electronic Arts (EA), Advanced Micro (AMD), Boeing (BA), Netflix (NFLX), and General Electric (GE).

While these stocks have performed unbelievably lately, they are now reaching extremely overbought levels as shown through our popular Trend Analyzer tool.  A couple like COTY and ANET have extended so far above their 50-DMAs that they are basically off the chart.  As a result of these readings, many of these stocks have poor timing ratings as they are increasingly overdue for some downside mean reversion.

At the other end of the spectrum, below we show the 30 S&P 500 stocks that are furthest below their 50-DMAs.  Newell Brands (NWL) is the leader of the group at 16.31% below.   NWL plummeted over 9% on Friday after lowering guidance, whereas before reporting it comfortably sat above its 50-DMA.  It has continued to decline today.  The next stock that is far below its 50-DMA is Take-Two Interactive (TTWO) which also saw a sour response to earnings a couple weeks ago.  This stock is another that actually sat above its 50-DMA before its earnings report was released.  A similar name, Activision Blizzard (ATVI), joins TTWO on this list despite their peer EA being one of the most elevated stocks.

Note that there is just one stock in the S&P 500 that is more than 10% below its 50-day, while there are 30+ that are more than 15% above their 50-days!

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We’ve all grown pretty accustomed to weaker than expected housing data over the last several months, but this morning we got some positive news as homebuilder sentiment not only improved in February but also came in higher than expected. According to the NAHB, homebuilder sentiment improved from 58 up to 62 and was three points ahead of consensus expectations.  For some perspective, the last time homebuilder sentiment saw a m/m increase of four points was in December 2017.

The table below breaks down this month’s report by present and future sales (both increased), traffic (increased), as well as regional sentiment (mixed).  Future Sales sentiment saw the largest increase this month, followed by Traffic and Present Sales. On a regional basis, both the Midwest and South saw strong gains, while the West and Northeast saw declines.

While this month’s improvement is welcome, looking at the steep drops we saw over the course of 2018, the general downtrend in sentiment remains intact.  In order to indicate a meaningful change in sentiment on the part of homebuilders, it’s going to take a couple of more months of similar reports.

Last week was a fairly busy one for economic data with 30 releases scattered throughout the week.  The majority of the reports were either weaker than expected, or in the case of indicators with no estimates, showed a decline versus their last print.  There were no indicators on Monday, so the release of January Small Business Optimism from the NFIB kicked off economic data on Tuesday with a greater than expected decline.  The most negative aspect of the data last week, though, was Thursday’s Retail Sales report for December, but as we mentioned last week, there are numerous reasons to be skeptical of the data.  CPI came out on Wednesday and was slightly stronger on a y/y basis.  PPI on Thursday missed estimates, though, and Import and Export Prices were both weaker than expected on Friday, posting y/y declines.

Turning to this week, with the holiday yesterday, the economic calendar takes a bit of a breather.  At 10:00 AM today we will get February data on homebuilder sentiment, followed by Mortgage Applications tomorrow.  Thursday we will get a flood of data including the Philly Fed, Jobless Claims, Durable Goods, preliminary Markit Manufacturing and Services, Leading Indicators, and Existing Home Sales.  There are no scheduled releases for Friday.

Equities rounded out last week with another push higher continuing its impressive run of several consecutive weeks of gains.  With markets closed yesterday in observance of President’s Day, today equities are kicking off this week entirely overbought.  Of the 14 index ETFs in our Trend Analyzer, all of them are extended well into overbought territory.  While not quite at extreme levels (the darker red area of the tool) yet, the indices have inched increasingly closer to there.  They have also pushed higher essentially in tandem; none of the indices are drastically more or less overbought than the others.  Though as they have been the better performing indices so far this year, small and mid caps are in fact all the furthest above their 50-DMAs.  Small caps specifically have seen solid upward movement in the past week (gaining over 4% each) leading them to be the group that is the furthest above the 50-day.  Conversely, large caps are still underperforming, but by a smaller margin than they had been.