The stealth bull market in water–$AWK, $CWT; all my market indicators positive


In the credits at the end  of the movie The Big Short, it says that the speculator who profited big time from predicting the housing collapse was now investing in water. Since the beginning of the year, the water utilities index has climbed +35%, 10th best performance of 146 indexes. Here is the monthly chart of the water index. Note the green line break-out (GLB) to an all-time high last January. (The 3 pink vertical lines mark short term market decline bottoms and clearly show that this water index climbed throughout the storms.)

Screen Shot 2016-07-17 at 12.17.37 PMSo what are some of the water stocks  behind this tide? See this weekly chart of AWK (+35%):

Screen Shot 2016-07-17 at 12.20.34 PMAnd CWT (+38%):

Screen Shot 2016-07-17 at 12.21.45 PMThese stocks have now backed off a little and on Friday had over-sold daily stochastic 10.4 readings (<20).  I therefore am looking for a low risk entry after each of these stocks bounces up from support. I will then place a sell stop below the bounce. Maybe the fact that clean water is becoming scarce around the world and in California bodes well for these stocks? These investments may never be under water……

While this market is extended with the T2108 at 79%, all of my GMI market indicators remain positive. After all, it is earnings season…









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