The Market’s Settling Down—But This Sector Is Just Getting Started

With the US stock market finally appearing to calm down from its violent gyrations—where the bullish percent index became super washed out and ultimately reversed to positive—and where the computer has been working tirelessly all week rendering down large amounts of data to see how the cards are now stacked, we move forward. In typical fashion, we are going to do a very simple top-down technical analysis using the current data accumulated this week from the SIA platform, with the objective to identify any new opportunities that might present themselves. The first step of this exercise is to start at a sector level to find sectors that gained relative strength during this volatile period, and here we find it useful to look at the SIA Sector Scope, which is a bell curve of all the sectors that combines relative strength readings with bullish percent measurements. Here, our technical eye is scanning for green boxes with capital letters—where the green represents a sector that is favored within the SIA Sector Matrix Report, and the CAPITALS represent that money flows are positive for the sector, as measured by double top buy signals on the underlying sector holdings. It provides a quick and easy way to capture critical information about money flows and potential opportunities under the hood. One that stands out here is circled in blue and is the FOOD sector, but there are others like Telecommunications (TELE), Utilities (UTIL), Metals & Mining (META), Wholesale (WHOL), Construction (CONT), and Aerospace (AERO). Why did we choose FOOD, one might ask? The reason is in the attached matrix position chart for the SIA Food and Beverage Equal Weight Index (EWI386), where we have added a black arrow to show the recent rise in sector relative strength, which might mean that we can find some new, fresh ideas that might be gaining strength in their own right.

In doing so, we scanned the Food and Beverage sector constituents quickly via the SIA report tab and found in the #1 position Celsius Holdings Inc. (CELH), along with many other potential ideas. But in looking at the SIA point and figure chart, we need look no further. We engaged the SIA matrix position overlay tool to further visualize CELH's relative strength through time within the SIA Mid Cap 400 Index Report, and the results highlight effectively CELH's new relative strength—having declined from $95 to as low as $21—but this selling momentum may be over, as buying appears to be fond once again of both the sector as well as CELH in particular. Also attached is a clipping of all the SIA reports that CELH is a constituent of, and note that it has rallied to the top of each of these reports to the #1 position. SIA is fond of high relative strength opportunities, as these outperformance rankings sometimes reflect improving investor expectations for strong company or sector growth—where in this case, we might be finding both at the very same time: sector and stock. Note the tight support levels at $34.63 (3-box reversal level), $33.28, and $31.36, both of which are supportive levels dating back to 2022–2023. Also note the resistance in red, with the levels $39.78, $42.21, $46.61, and $49.46 offering points where the stock might run into sellers keen to finally walk away from their poor entry points. But with the negative trendline well above at $65, there still might be loads of room for further advances, especially should the markets balance away from risk aversion.