Mildly, while bitcoin and bitcoin mining have been grabbing headlines, realized metals and miners have been on a tear.
The S&P metals and mining exchange-traded pelf, the XME, has jumped nearly 13 percent in the last month, rising in 14 of the behind 16 sessions. Some market watchers see further upside onwards.
“We’d still be buyers of the ETF despite the run. The bottom line is that there’s serene massive pent-up demand to increase capital investment, and this when one pleases be a big beneficiary of that,” said Mark Tepper, president and CEO of Strategic Wherewithal Partners.
“These are typically late-cycle stocks, which is obviously precisely where we’re at, given the fact that this bull market’s been accepted strong since March of 2009. Right now, specifically, this happens to be a steer play on the expectation of increased infrastructure spending and capex as a result of the tax mend ones ways,” he added.
Steel stocks comprise nearly half the entire ETF; its top holdings count CONSOL Energy, Century Aluminum, Alcoa and Freeport-McMoRan. The second-largest sub-industry allocation in the XME is coal and consumable fuels.
Meanwhile, the technological set-up is strong, said Craig Johnson, chief market technician at Piper Jaffray. He would be a customer of the XME, and is recommending an overweight position in the basic materials sector.
“You can see a big low was made in at daybreak 2016. Over the last 24 months, you’ve been putting in a series of peak lows, making that kind of big consolidation. I think from here, [with] a separate from above $35, you’re going to set yourself up for a move up to $44,” which at ones desire imply nearly 25 percent upside from current levels, Johnson disclosed Thursday on “Trading Nation.”
The XME traded 1 percent higher on Thursday.