Scott Fullman’s “Technically Speaking” Diary for January 11, 2025

As our readers know, we have been positive on the SPDR S&P Homebuilders ETF (XHB - $18.53) for several weeks, and as recently as this past Monday, highlighted the fund and the sector. Today the group is higher versus negative broad tape action, led by Lennar (LEN - $21.45), which reported earnings. Also moving higher has been Lowes Companies (LOW - $26.55), another stock that we have hightlighted.

USG Corp. (USG - $13.0 — The stock is accelerating its upward breakout after breaking above the 200-day moving average last week. Upside momentum is on the rise and relative performance is string, Resistance is at $13.30 and support is ats $10.90. Implied volatility is high for this stock. Traders should consider selling the Feb 12 Puts at $0.75, with a delta of -28%.

Cheesecake Factory (CAKE - $29.20) — Yesterday Prof Rothbort said that fundamentally the stock was fully valued. From a technical perspective we see that the shares have resistance in the $29.75-$30 range. For those still holding shares we suggest selling the CAKE Apr 31 Calls at $1.20. If the stock continues to rise, and the shares are called away, your effective sale price would be $32.20, which is 10.2% above the current market price of the stock.

Intel Corp. (INTC - $25.82) — Over the past several days we have noted that the semiconductor group has been showing leadership qualities. Intel is setting another 52-week high today and we are seeing rising momentum in the stock. The daily chart has positive Directional Momentum Indicators (DMI) that are being confirmed by the Average Directional Momentum Index (ADX). The weekly chart has positive DMI and the ADX is nearing a positive signal. An alternative to buying the stock is to purchaes the Mar 26 Calls at $0.87. The delta is 48%. This strategy reduces total capital risk by nearly 97%!

Union Pacific (UNP - $111.46) — DJ Transport Avg is outperforming SPX and there are a number of issues in the sector that are leading. One with a positive breakout from a consolidation on the weekly chart is UNP. The weekly DMI and ADX are positive and momentum appears to be rising again. Support is at $107. Our stop is at $107.49.