Welcome back for another Top Down Trade of the Week.
This is a classic leadership scan.
We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it.
This week’s standout is Materials, holding steady at the number four spot in our sector rankings.
It’s not the first time we’ve highlighted Materials since we began publishing this scan. Strength has been quietly building under the surface for a while now.
Just last week, $XLB posted its best relative performance versus the broader market in over five years.
I'm open to the idea of a big rotation into cyclicals in the back half of this year.
Here is a look at our overall industry rankings, which shows metals and mining jumping into the top 20.
It’s breaking out of a base with authority. If we’re right about this rotation into materials and metals, $AG is one of the names we want to be in.
However, my favorite setup this week is a $2.4B company that makes fire safety products and specialty chemical solutions.
Here’s Perimeter Solutions $PRM.
Perimeter Solutions has been basing since coming public in November 2021.
After a couple failed breakout attempts, price is piercing through the upper bounds of this multi-year range — and this time looks different.
I like PRM above 15, with a primary target of 22 and a secondary objective of 35 over longer timeframes.
Our team at ASC is constantly running these kinds of top-down scans. If you want access to our research and the trade ideas that come out of it, join us today—risk free.
