These stocks are looking good as we head into 2024 | Exchange places with Tom Bowley

happy new year!

We’ll be commenting on various sectors, industry groups, and individual stocks flashing breakouts and relative strength throughout 2024, but what about stocks that are just starting to show strength? There are a number of individual stocks hitting 52-week highs and all-time highs as they close out 2023, but here are two stocks that struggled in 2023 and now appear to be headed for a much stronger year.

3M Company (MMM):

It certainly appears that MMM’s long downward trend has been reversed.

Breaking the absolute price downtrend is the first clue that things could be very different for MMM in 2024. Also note that weekly PPO has turned positive for the first time since the third quarter of 2021. The next confirmation signal would be a clear reversal in MMM’s relative performance compared to the benchmark S&P 500. In the bottom panel above, we can see that MMM is challenging its relative downtrend line as 2024 begins.

Lastly, MMM has a dividend yield of 5.47%, which could potentially make it a good investment for those who have a more income mindset than capital gains mindset. Perhaps MMM will offer good capital gains as a kicker in 2024.

Citigroup (C):

C broke a similar downward trend in the fourth quarter of 2023 after a downward trend across most banks. An inverted yield curve has historically had the greatest impact on banks because it puts pressure on net interest margins, a key driver of bank profits. However, the stock market is looking to the future, and we believe expectations of multiple cuts in the federal funds rate are helping to drive banks’ current performance. This is likely to continue in 2024. In chart C, you can clearly see the reversal of the downtrend.

In addition to a more favorable price chart, C also boasts a strong dividend yield of 4.04%, providing another solid income option for that style of investor. Additional capital appreciation would be just the icing on the cake.

On Monday, I’ll be giving you some tech companies that look set for a very strong 2024. There will likely be several triggers to watch to confirm a strong year ahead, but recent absolute and relative price strength and an excellent AD line are in the cards. It is providing early bullish signals. If you would like to see this chart, I will send it to your email address on Monday morning. Sign up here to receive the free EB Digest newsletter.

Additionally, the annual MarketVision virtual conference will be held next Saturday, January 6th. Grayson Roze, Director of Operations at StockCharts.com, will join us on “MarketVision 2024: Beyond The Fed” to provide stock market forecasts for 2024 and S&P 500 targets. It was a year ago that I correctly predicted that the S&P 500 would reach 4700 by the end of 2023. A year ago, we didn’t see many bull markets, but it turns out that the bulls are on the right. The S&P 500 rose 24% to end the year at 4769.83. I thought we would see about 23%. 1% discount, not bad. Click here for more information and to register for this year’s event.

Happy New Year and happy trading!

tom