Sell-Off Picks Up Steam Amid Iran Escalation; LandBridge, Cardinal Health, USFD In Focus

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0:32Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, March 12th. It's Alyssa Coram here. And solid losses across the board for the major indexes today with oil prices spiking once again as mid-east tensions continue to flare. Joining me now is my colleague Ken Shreve here with a rundown of what we're going to be going over today. Ken?

0:53Alissa Coram:Yeah, not the close that we were hoping for, Ali. Sharp losses again, but as usual, hey, we always find three stocks to look at since oil was up sharply. Again, let's take a look at LandBridge, oil and gas producer, and then a couple of maybe not so exciting stocks. We could take a look at a drug distributor, Cardinal Health, and an exciting food distributor here, USFD, U.S. Foods. But it looked good to me.

1:29Ken Shreve:Well, maybe not exciting, but we've got to be looking at stocks that are holding up in this weak market. So those, at the very least, provide us clues as to where that strength lies and help us build our watch list. All right. Thanks, Ken. Let's take a look at the major indexes. Here is the Nasdaq Composite down 1.8 % on the day, not to be outdone. By the Russell 2000, down 2.1 % on the day and closing down below that round number of 2 ,500. The S &P 500 was down about 1.5 % on the day. You can see the levels there. We'll get into that. And the Dow down about 1.6%. So solid losses across the board here.

2:23Ken Shreve:And this rally attempt, more or less, hanging on by a thread here, Ken. What say you?

2:31Alissa Coram:Well, yeah, it's really just that rebound off the 200-day moving average looked pretty strong four days ago on Monday. And here we go. here we go. This was a down session and we looked like we got higher volume again today. So here we are again where we're getting these kind of lower volume gains and higher volume declines. So this is kind of more of the same where we get this price and volume interplay that we don't like to see. Lower volume gains, higher volume declines, just a market that's under distribution here. So we don't like to see that. We want to see this 200-day moving average hold.

3:20Alissa Coram:We still have a rally attempt that's intact here. We mentioned yesterday, as long as this Monday low holds that was put in, the rally is intact. But what we want to see from here is some higher volume gains, some lower volume declines. We'd like to see these headlines from Iran start to calm down a little bit. I woke up this morning. I hear that some big tankers are on fire in the Strait of Hormuz. And, you know, it just seems like we're doing all this bombing in Iran. And yet Iran still has the means to, you know, cause problems by firing on ships in the Strait of Hormuz. So it's a little frustrating.

4:07Alissa Coram:And then we get the comments from the second supreme leader that was put in power. He has been very silent, and there have been reports that he's been injured by bombing, and apparently Iranian TV had some comments from him finally today. But he's talking tough and saying that he believes that the Strait of Hormuz should remain closed and that Iran is going to continue to attack its neighbors, And that caused another spike in oil prices today, up 10%, trading around$95 a barrel. WTI crude oil futures, so you saw another big spike in oil prices today. So lots of headwinds for the market here. And this is problematic, and bond yields up sharply again today.

5:03Alissa Coram:So no surprise to see the market act the way it did. You know, again, leading growth stocks, not too bad today, but another day of distribution, you know, for the NASDAQ and I think the S &P 500 as well. So kind of treacherous conditions out there. And, you know, NASDAQ still holding above this key support level here, but we'll see if it holds or not.

5:32Ken Shreve:Yeah, treacherous indeed. and we'll be keeping an eye on that reversal low from Monday right at that 200-day line. We really need support to hold there. So as our historical analysis has shown is once you crack below that level, the selling can get a lot worse and it can potentially take longer to play out before the market repairs itself. So we'll balance that historical view with our day-by-day analysis as always, but just wanted to point that out as well. All right. Moving on, Ken, let's get your thoughts on XLU. What do you think about how utilities are acting, holding up in this market?

6:20Alissa Coram:Well, yeah, not surprisingly, this is, you know, an area that you would expect to see do well. We're looking at some of the S &P 500 sectors today. XLU was a good performer. We were looking at some utilities today outperforming in the market. I think DUK, Duke Energy was a name that we were looking at. This is a stock that was trying to break out today in the utility group. trying to break out of a little pattern here. So, yeah, not surprising to see the utilities outperform. There was a period of time where the utilities, we were almost looking at these as power providers to the data centers.

7:10Alissa Coram:Now they're not so much the data center providers. It's almost like dividend-paying safe haven places in this type of market. So I wouldn't be surprised to see the utility stocks outperforming in this type of market. you tend to see nice dividend yields. So XLU kind of finding support here at short-term moving averages, not surprising to see XLU seeing some money flow today as money flows out of a lot of growth stocks and that risk off trade is certainly in full effect right now. So not surprising to see the utility money flow here.

7:53Ken Shreve:Right. Right. And you mentioned the price of oil. Let's just take a quick look at XLE, the energy sector ETF. Holden strong.

8:02Alissa Coram:Yeah. Yeah. And we saw we saw more money flow into select oil and gas names. Chevron outperforming in the Dow Jones again today. One of the top performers in the blue chip index. And, you know, that that's been a great look at that move in Chevron today. So a lot of these stocks are just running and running and running. But XLE has been a great performer. That also showed some money flow as well today. But yeah, Chevron was doing well in the Dow. XLE has been running higher, just riding that 10-day moving average higher. So we'll take a look at LB in just a little bit in the oil and gas group.

8:45Alissa Coram:But energy stocks, particularly the oil and gas producers, have been running nicely with oil marching towards$100 a barrel. WTI, that's the benchmark. That is at$95 a barrel. But Brent, which is the international, I believe that hit$100 today or closed at$100. So we'll see if WTI eventually gets there. We'll see.

9:17Ken Shreve:Yeah. And in terms of playing this space, Ken, I think that's the question that a lot of investors then ask us. They want to be where the money is flowing. But at this point, it's a matter of timing. It seems like with a lot, and we will look at LandBridge to your point, but with a lot of the leading energy stocks, the train has already left the station. And then when it comes to USO, that's just so volatile and headline driven and you don't know which way the headline the next headline is going to go. Seems like a little bit of a dangerous game.

9:48Alissa Coram:Yeah, well, especially with USO, I mean, you did really have a crystal clear by point with with USO. And this is the one that really tracks the price of oil. But yeah, with that red line that you pointed out there, just a crystal clear breakout when it was initially moving out over that$80 a level. But you can see it's gotten increasingly volatile. You can see when the price of oil went over$120 a barrel for that quick. I think that was on Monday when we had that really volatile day. But it's been very, very whippy. Obviously, if you were able to buy it when USO, when it initially broke out over that 80 level, you know, buying right helps, helps a lot because that was a really nice entry point on that initial breakout.

10:39Alissa Coram:But yeah, buying up here and just, it's just the inherent volatility. You just don't know what's going to be going on in the Strait of Hormuz on a, on a daily basis at this point. But there's just the volatility in the, in the oil market right now. You just don't know if it could be up up or down 10 % on any given day. Looking among individual drillers, individual oil and gas stocks, that's a little bit easier than trying to play the daily whipsaws in terms of the price of a barrel of oil. Looking at individual stocks, it's a little bit easier. But still, the names like Chevron, they've been running higher for a while.

11:18Alissa Coram:I just want to be careful not to chase the individual names as well.

11:23Ken Shreve:Absolutely. All right. Anything else that you want to look at, Ken, before we take a look at LandBridge or should we go there?

11:30Alissa Coram:I think we should go to LandBridge because this is a good example. It's actually a name that we're looking at for the leaderboard model portfolio and a name that's not extended, a name that's still setting up here and a name that we're seeing a lot of positive elements here. So a name that it's just not, The train has not left the station here. It's still consolidating, still building a base, which we like to see. So just some things to... Balance your trading strategy by adding futures.

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12:29Alissa Coram:To talk about here, this is, first of all, a company called Landbridge, ticker LB. And this is a company that's an oil and gas producer. They've got a big, big footprint in the Permian Basin in Texas. Specifically, they're in the Delaware Basin of the Permian Basin, and they own about 300 ,000 acres. So they own a lot of land there. The interesting story with LandBridge is they're a plain old-fashioned oil and gas producer, but they did sign a fairly big deal with an electric utility called NRG Energy. The ticker is NRG. And nothing has been consummated here, but NRG is a utility. And they did sign a land agreement with Land Bridge in the Permian Basin.

13:21Alissa Coram:And if it's approved, this could be an 1 ,100 megawatt natural gas data center project. that LandBridge is going to be working with NRG with. So we'll see if it works out, but this is a collaboration between the two companies. So LandBridge is looking at taking some of their Permian Basin land and leasing it out to NRG for a data center. So we'll see how that works, but LandBridge is a nice cup with handle base forming here. We can go back to the daily chart here and just see a nice little pullback here to short-term moving averages. Yeah, so on the daily chart, you can just see this is the handle that's been forming over the past 10 days or so and support starting to appear at the 21-day moving average.

14:12Alissa Coram:Again, a nice up day for LandBridge today, up close to 3 % on a strong day overall for oil and gas stocks. And we're just kind of keeping an eye on this one. It tends to trade a bit thin. You know, it's a liquid stock. It's got a nice big market cap, but it tends to, you know, show some whippy price action. But we're going to keep an eye on this one and see if it can ultimately break out over that 76 price level. You can see the fundamentals down at the bottom here. The recent revenue growth, 76%, 56%, 32%. And the earnings growth has been outstanding as well. So a lot to like about LandBridge and just a name that we're watching garners very, very high ratings from IBD.

14:58Alissa Coram:So a name that we're kind of keeping an eye on here.

15:02Ken Shreve:All right. Yeah, I really like that short-term relative strength and a compelling setup with that triple-digit bottom-line growth to boot. So a lot to like here. And thank you for giving us all of that background on the new what's going on here with LandBridge. Absolutely. Okay, next on the list, let's take a look at CAH. This is Cardinal Health. I know the team has spoken previously about how sometimes in the medical sector, you can view these stocks as defensive and growth, which in times of uncertainty can be a good combo, Ken.

15:40Alissa Coram:Yeah, yeah. And Cardinal Health is, you know, it's in a good industry group. And it's just one of these companies that, you know, it's not going to show the growth that Landbridge is, but it's got a very steady track record of growth. So it's in a good industry group that ranks relatively high in our 197 industry group rankings. This is just basically a health care services company. They do basically drug distribution. They distribute drugs. They distribute medical supplies. So it's a very, it's an industry that's got very consistent, you know, consistent earnings. If we go to the weekly chart here, I think this is a company that probably going to have a pretty good earnings stability rank.

16:31Alissa Coram:Not as good as I thought. 13, this is a ranking on a one, yeah, one to 99. And one is actually the best here. So instead of one to 99, with 99 being the best, one is the best for the earnings stability rank. And the stability rank here is 13. So it's not one which would be the best, but 13 is still pretty high. And you can see, looking back on recent earnings, the bottom line growth is there. So fairly steady, Eddie, here. And back to the daily chart, it's a recent breakout that didn't make a whole lot of progress, but it's coming down and just kind of testing the 50-day moving average. And another stock today on a real sharp down day for the market.

17:17Alissa Coram:Again, market's defensive nature going into some of these drug distributors, which again can be a defensive kind of safe haven for the market. The stock was up 1.7 percent today. So we'll see if support eventually holds here. But again, a good defensive area for the market that saw some money flow today. volume was pretty heavy for Cardinal Health today on a down day for the market. So another area that might be a safe haven here to keep an eye on. So another name I'm keeping an eye on here.

17:53Ken Shreve:One for the watch list. And let's round things out with a look at USFD in the food wholesale group here. An explosive move on earnings. It did give back quite a bit of that, Ken, but found support right where you'd like to see in another stock on a down day bucking the downtrend.

18:18Alissa Coram:Yes, yes. And, yeah, good point about, you know, really, really nice earnings move. And it did give back some of that gain. But, again, it did come down and looks like the selling got exhausted. It came down and found support, reversed higher off of that 50-day moving average, and now it's up three days in a row after that. And a good move again today. And again, just a very defensive industry group, U.S. Foods, again, just a food distributor here. So again, an industry that you can count on very consistent earnings. I want to go to the weekly chart here and see what the earnings stability rank here isn't as good.

19:09Alissa Coram:The earnings stability rank is kind of high here. But, you know, when I look at the recent earnings at the bottom along here, I do see a fairly consistent track record of growth here, too. So, again, the weekly chart, this is as good a test of a 10-week moving average. After a breakout from a pretty long consolidation here, this looks like a pretty good test of the 10-week moving average. That 10-week line is holding above, you know, the last buy area here. So it looks like a pretty darn good test to me. And again, could be the right stock for the right market here.

19:47Ken Shreve:Yeah, it does look like a good test there. I totally agree. That relative strength line going back a couple of months now, quite compelling. link. All right, Ken, thank you so much as always. We appreciate your analysis.

20:01Alissa Coram:Tough market out there. Tough market. Be careful.

20:03Ken Shreve:It is. Stay safe out there, friends. All right, everyone, that is it from us for today. But we will be back with more tomorrow morning on IABDLiveInvestors.com slash IABD Live for all the details. We will see you then. And then we'll also see you right back here tomorrow after the close to wrap up the week, we've got Justin Nielsen in for Mike Webster. We'll see you then, everyone.

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