Ahead of Saturday's scheduled U.S. Senate vote, today we review some of the more prominent themes in the proposed Infrastructure Investment & Jobs Act and provide stock and ETF ideas that could benefit from the passing of the proposed legislation.

After failing to reach an agreement on Thursday, the U.S. Senate is scheduled to vote once again on Saturday to finalize and move towards the passage of the Infrastructure Investment and Jobs Act, a bipartisan bill that includes $550 billion in new federal investment in America’s infrastructure (Source: Reuters) While the 2,702-page, $1 trillion proposed bipartisan bill makes mention of investments into the traditional infrastructure realm such as repair of roads and bridges, public transit upgrades, and the replacement of lead water pipes, it also unveils plans to update and improve other vital areas of modern-day society such as providing reliable high-speed internet and broadband access for all Americans and electrifying schools and buses across the country with a focus on clean energy transmission. The legislation includes a comprehensive Buy America provision to ensure that all taxpayer-funded infrastructure and public works projects are built with American iron, steel, manufactured products, and construction materials in an effort to create manufacturing jobs in the USA. (Source: The White House) Click here to read the proposed bill in its entirety.

In Wednesday’s DALI & US Equity Overview feature, we discussed some of the sub-sectors that could be affected the most by the passing of the Infrastructure Investment and Jobs Act, such as heavy construction, transportation services, communication technology, and pollution, and reviewed each area’s relative strength when compared to one another using DWA sub-sector indexes. Today, we will take our analysis one step further and drill down into technically sound individual stock ideas that may benefit from the passing of the Infrastructure and Jobs Act, as well as a few ETF ideas to consider if looking for a way to "play" the proposed legislation. Bear in mind that the infrastructure bill has not been passed and that the potential list of related stocks and sub-sector themes that may be impacted is very broad. The stocks and sector themes discussed today are by no means the final list as by the time the bill is passed, the list could either be more or less than those shown. The degree to what stocks and related sub-sectors may be impacted most also has the potential to change. 

Access to Reliable Broadband for All Americans

• Charter Communications, Inc. CHTR – CHTR is a technically sound 4 for 5’er that ranks within the top third of the media sector stock matrix. CHTR, a fiber and cable provider, has been trading in a positive trend since January 2019 and has maintained superior strength versus the broader market since moving to an RS buy signal in April 2011. With yesterday’s session, CHTR printed a new all-time high at $776 where it currently trades on two consecutive buy signals, confirming that demand is in control. Furthermore, monthly momentum has been positive for three months, adding to the positive technical picture. Although the weight of the evidence for CHTR is overwhelmingly positive, we do note that the stock is trading in heavily overbought territory with an OBOS% reading of 93% so those looking to initiate new long exposure may want to scale in here or buy on a pullback/normalization of the trading band. Initial support sits at $704, with additional support available at $672. Although CHTR trails the S&P 500 Index by 154 bps on a year-to-date basis, it is up an impressive 12.78% over the last 60 days, outperforming the SPX by over 8% during that period.

• Liberty Broadband Corp LBRDA – Liberty Broadband Corp, a holdings company that engages in the cable, broadband, and mobile location technology businesses, is a 3 for 5’er within the media sector that is trading well above its bullish support line that dates to April 14, 2020. LBRDA is showing long-term strength versus the broader market, evidenced by a market RS buy signal, and has given four consecutive Point & Figure buy signals on its default trend chart over the last four months. With yesterday’s action, LBRDA printed a new all-time high at $178, which pushed the stock into slightly overbought territory with an OBOS% reading of 77%. Like CHTR, those wanting new long exposure may wish to scale in here. Furthermore, LBRDA trails the S&P 500 by 5.52% on a year-to-date basis however we have seen the stock outperform the broader market by over 7% over the last three months and is one to add to your list if looking to play the broadband piece of the proposed Infrastructure Investment and Jobs Act. 

Other Stock Ideas:

• Comcast Corporation - CMCSA - 3 for 5'er

• Dish Network Corporation - DISH - 3 for 5'er

• AT&T Inc. - T - 1 for 5'er

Road and Bridge Repair, Traditional Infrastructure

• Nucor Corporation NUE - NUE, the largest domestic steelmaker, is a high attribute name that ranks #1 in the steel/iron sector stock matrix. NUE continues to trade well above its bullish support line that dates to August 2020 and is showing near-term strength versus the broader market. In June, shares of NUE reached their all-time high at $110 twice, which formed a double top on the chart, before experiencing some weakness throughout most of July. On July 27, however, NUE returned to a Point & Figure buy signal at $99 before moving higher to $106 where the stock sits today. From here, a move to $112 would mark a new all-time high on the chart. NUE also just experienced a flip to positive weekly momentum after having spent the previous eight weeks on the negative side, suggesting the potential for higher prices. With an OBOS% reading of just 11%, new positions are welcome here. NUE has support available at $88. Note NUE offers a yield of 1.52% and is up over 90% on the year. 

• Martin Marietta Materials Inc MLM – MLM, an American-based company and a leading supplier of building materials, is a 2 for 5’er within the building sector that recently moved back into a positive trend when it broke a double top at $364 on July 28. In May, we saw MLM form a double top at $380 before experiencing some near-term price weakness throughout June and July. Since being promoted to a 2 for 5’er, shares of MLM rallied higher to $376 before pulling back to support at $360 where the stock trades today. Furthermore, weekly momentum has been positive for three weeks, suggesting the potential for further upside. Although MLM is a lower attribute name, this is an improving stock to monitor to play the proposed infrastructure bill as MLM is a supplier of crushed sand, gravel, ready-mix concrete, and paving products and services. 

Other Stock Ideas:

• Caterpillar, Inc. - CAT - 2 for 5'er

• Deere & Company - DE - 4 for 5'er

• United Rentals, Inc. - URI - 5 for 5'er 

Clean Energy Transmission, Electric Vehicles (EVs), & Energy Infrastructure

• Eaton Corporation ETN – Eaton is a diversified machinery and tools company that has segments of its business within clean energy and utilities, along with the production of electric car components. ETN is a 4 for 5’er that ranks in the top third of the Machinery and Tools sector matrix. The stock has maintained a positive trend since May of 2020 in addition to long-term and near-term positive RS versus the market as defined by the S&P 500 Equal Weight Index and near-term positive RS versus its peer group. On the chart, ETN completed a shakeout pattern when it broke a triple top at $150 in July before rallying to break a double top at $156, completing a bullish catapult, and reach a new all-time high at $164. Okay to consider the stock in the mid-$150s to low-$160s. Initial support lies at $148, while additional support lies at $140.

• OSHKOSH Corporation OSK – OSHKOSH provides technology and equipment to the auto industry and has recently made bounds in the electric vehicle market. Not too long ago the company, which owns Pierce Fire Trucks, launched its first zero-emissions hybrid fire truck with OSHKOSH EV battery and hybrid technologies. From a technical perspective, OSK is a 5 for 5’er that ranks in the top half of the Autos and Parts sector matrix that’s accompanied by a yield north of 1%. On the chart, OSK has shown some near-term weakness with two consecutive sell signals since June and the chart has fallen to form a double bottom at $114 with recent action. Ideally, we would look for the chart to move back into X’s and rally to return to a buy signal, which would currently be a potential double top at $124, before considering exposure. Note resistance lies at the stocks May rally high at $136, while support lies at $112 and at the bullish support line at $106.

Other Stock Ideas: 

• Brookfield Infrastructure Corporation Class A - BIPC - 0 for 5'er

• Quanta Services Inc. - PWR - 5 for 5'er

• Blink Charging Co - BLNK - 0 for 5'er

Repair and Improvement of Waterworks/Clean Water/Wastewater Infrastructure

• Clean Harbors Inc. CLH – Clean Harbors Inc. has a variety of business segments, but one of them is wastewater treatment in which they offer treatment technologies for liquid and semi-liquid hazardous and non-hazardous wastewater. From a technical standpoint, CLH is a 3 for 5’er that ranks 3^rd (out of 18) in the Waste Management sector matrix.  The stock has maintained a positive trend since November of 2020 and near-term positive RS versus both the market and its peer group. On the chart, CLH rallied above its May rally high earlier this month when the stock moved above the $97 level for a new high at the time. After a brief pullback to $94, the chart moved back into a column of X’s, breaking a double top at $98 for a second consecutive buy signal, before moving up to a new all-time high on the chart at $100.  CLH can be considered in the $97 to $100 range at this time. Initial support lies at $94, while additional support can be found at $90, the July pullback low, and the bullish support line upon a reversal into O’s.

• Evoqua Water Technologies Corp. AQUA – AQUA’s primary focus as a company is wastewater management, filtration, and a variety of other segments that focus specifically on water. AQUA is a 4 for 5’er that ranks 1^st (out of 49) in the Utilities/Electricity sector matrix. Evoqua has maintained a positive trend since May of 2020, near-term positive RS versus the market in June of this year, and positive long and near-term RS versus its peer group. With recent action, AQUA broke a double top at $35 for a second consecutive buy signal before rallying up to the $36 level for a new all-time high on the chart.  Okay to consider partial positions at current levels or a full position on a pullback to $33 on the chart. Initial support lies at $31, while additional support lies at the bullish support line, currently at $23. 

Other Stock Ideas:

• Middlesex Water Co - MSEX - 5 for 5'er

• Watts Industries, Inc. - WTS - 4 for 5'er

• American Water Works - AWK - 1 for 5'er

Infrastructure Investment and Job Act-related ETFs