Recall this blog post from the summer where I noted bullish signs of accumulation (buyers of size methodically legging into stocks after corrections) in BZ and HHC. Despite the cyclical bull run since March 2009, we know there have been some clear laggards, namely in the steel and coal space. Beyond that, engineering plays like Foster Wheeler have been the definition of fair or dead money since the 2008 crash.
Recently, though, you can see that even a loser like FWLT has seen notable signs of accumulation, as you can see below on the daily chart.
By now, you are probably well aware of the headwinds these laggard sectors face. Sometimes you have to catch yourself and ask, “Sure, we know these stocks are losers. But, at this point, after years of terrible price action, how much bad news has been priced in?” While many of these plays are not my type of technical setups, FWLT is improving within rising daily moving averages and better overall price action, coupled with the accumulation.
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