Don't Ignore This Chart

NuCor (NUE) Makes New All Time Highs

Some of the Steel sector has been moving up aggressively. But poking out to new 52 week and All Time Highs today was NuCor (NUE).

This chart has great technicals. The RSI has stayed in bull mode above 40 for 2 years. The MACD has gently pulled back to the zero line and completed its reset and is off to the races with a big weekly histogram bar.  The SCTR has not quite moved into Top Quartile yet, but it looks to be headed up there. There are a few in the industry group that look worthy of attention.  To find them, click on sector summary on the home page. Go to the Materials sector, click on that. Choose Steel as the next industry group and then select the one month setting up top on the drop down menu. 

If you liked this article, feel free to forward it to investing friends and family. The chart is printable. It should also be clickable so that you can go look at the settings.

We try to keep our articles informative and entertaining. Make sure you check out the other blog writer articles in MailbagChartwatchersTraders JournalDecisonPointDon't Ignore This ChartChip AndersonScanning Technically, and The Canadian Technician. Subscribers have access to blog articles by Arthur Hill, John Murphy, Martin Pring as well as the DecisionPoint Tracker and DecisionPoint Reports. Don't forget to look for the subscribe button for RSS feeds and email. 

On the Blogs tab, you can also see the Top Advisors Corner  in the right hand panel where other technicians post their work. If you are paying for newsletters all over the Internet, don't miss all the articles here that are included!

Good trading,

Greg Schnell, CMT

Breakouts Turn Support on S&P 500 P&F Chart

The Point & Figure chart below, which is based on 10 points per box, shows the S&P 500 with successive upside breakouts in April, May and June. A key tenet of technical analysis is that broken resistance turns into support. The green support box, therefore, is based on these three breakouts and marks a significant support zone in the 1880-1900 area. Notice that the S&P 500 held the top of this zone with the July-August decline (red 8). 


Click this image for a live chart

Ross Stores (ROST) Leaves The Roost

The Consumer Cyclicals have been spiralling into the leading zone on the RRG charts. The stocks have been surging. Arthur Hill and I have been pointing to Consumer Cyclicals since mid July. Home Depot (HD) broke out last week and Arthur covered it in the Market Message to subscribers yesterday Arthur Hill's Market Message.  ROSS Stores (ROST) is snapping a major downtrend line that bottom fishers might be interested in. It is also surging compared to the S&P 500 shown in purple (SPURS), the red area chart shows it breaking out compared to the Consumer Cyclical sector , and the green area shows it starting to outperform the industry group.  The SCTR ranking is still a lowly 46 so that is mediocre at best. 

With the break of the big downtrend but still below the 200 DMA, is has work to do. However, If you follow Dr. Elder's work the candle colour has to be blue or green on the weekly. It turned green again today and has been oscillating between green and blue for 4 weeks now.

You can also see the weekly MACD gave the first positive cross since the same time last year!   Without a doubt, there is lots of positive price action in the Consumer Cyclicals sector.

If you liked this article, feel free to forward it to investing friends and family. If you didn't like the blog, please send me a note on what I could do better. The charts are printable. They should also be clickable so that you can go look at the settings.

We try to keep our articles informative and entertaining. Make sure you check out the other blog writer articles in MailbagChartwatchersTraders JournalDecisionPointDon't Ignore This ChartChip AndersonScanning Technically, and The Canadian Technician. Subscribers have access to blog articles by Arthur Hill, John Murphy, Martin Pring as well as the DecisionPoint Tracker and DecisonPoint Reports. Don't forget to look for the subscribe button for RSS feeds and email. 

On the Blogs tab, you can also see the Top Advisors Corner  in the right hand panel where other technicians post their work. If you are paying for newsletters all over the Internet, don't miss all the articles here that are included!

Good trading,

Greg Schnell, CMT

Delta Flies Above Key Moving Average

Delta Airlines (DAL) appears to be ending its two month correction with a surge back above the 50-day moving average. Notice how the stock successfully tested the 35 level twice and did not even test the rising 200-day. The recent move above the June trend line and 50-day moving average is medium-term and signals a continuation of the long-term uptrend. The indicator window shows momentum improving as MACD turns positive again


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Time To Nibble On Today's Breakout In Corn?

The chart of Corn (CORN) has been moving sideways for a month. We have been watching corn closely. On the big downward intraday reversal today, CORN held the gap on the open.

The RSI has not broken out yet and this is bottom fishing. But the volume trend looks different this week than it has for four months.

Plan your trade, complete with stops. This could be a wild ride on a harvester.

Good trading,

Greg Schnell, CMT

WuXi Surges to Form Bullish Reversal Pattern

WuXi PharmaTech (WX) is a mid cap stock showing a big gain in its StockCharts Technical Rank (SCTR) on Thursday. Notice that the SCTR surged above 50 and to its highest level since May. On the price chart, the two lows in the 30.5 area form a possible double bottom. A breakout at 35 would confirm this pattern and target a ~15 percent advance from the breakout area. 


Click this image for a live chart

 

Will This Be The Tesla (TSLA) Top Or The Tesla Takeoff?

Tesla (TSLA) generates lots of discussion these days. From the Consumer Reports with no door handles appearing to giga factories and new SUV's, the stock couldn't be more in the news. Today, TSLA is testing the thrust high from February 2014 with a peak at $265.  It has made a new high as the Open, High, Low, Close information has $265.64 as the daily high. Five things make this chart compelling to analyze at this point. The small channel, the large channel in light blue, the recent cup with handle, the potential double top, and the MACD turning higher.

While the stock is clearly in an uptrend, let's comment on each one of these.

1) The small channel would appear to be about 1/3 of the larger channel. If Tesla respects this dark blue channel line, we could expect a pullback to $240 or the lower channel line. Having the two trend lines (Horizontal resistance and channel resistance) suggests this area might be more difficult to get through but the lower channel is only 10% down from here.

2) The wider channel in light blue has three touch points on the top and the recent uptrend since May is on the same slope creating a nice large channel for TSLA to move within. Bullish potential exists.

3) The Cup with Handle pattern. February top, May low, June high is the cup, July low is the handle. This is an ok pattern, but we would like to see the breakout above the $244.49 high on big volume. The breakout week was less than the 50 Week average but the two strong weeks together look more compelling. The three week base in the handle had one week with the smallest volume going all the way back to the initial breakout in May 2013. The volume drying up in the handle is very bullish! The surge in volume as it rises from that quiet week is very good.

4) The potential double top is always a hurdle, but it is also just a place every chart of higher highs has to get through. At this point the green Elder candle suggests be bullish or stand aside, but you can't go short unless the candle turns blue on Friday. Friday is Options Expiration day to close the weekly candle so that may make the final candle information more volatile as the options market changes to a new month. Dr. Elder reiterated his system at Chartcon 2014 with fabulous charts and commentary that make the candle style valuable for all who use multi time frame signals. At this point everything is bullish and TSLA will probably track the main indexes higher if the indexes can make new highs over the next few weeks.

5) The MACD lines have recently turned up and this recent histogram stack is larger than the late June Stack above zero, so that is positive and bullish. Dr. Elder uses the histogram stack as a major clue for timing. One major concern is the lower high on the MACD line at the February high. If the current price stalled here and the histogram closed the week smaller than the previous week, I would be very cautious about remaining long or at least be protected through options on TSLA. Lower highs on the MACD and weaker histogram stacks as the stock makes higher highs is usually the scale of divergence that marks significant tops. All that to say, this is a pivotal point for TSLA to break higher and hold the higher highs as a Tesla takeoff!

At this point it would be prudent to watch price action closely for both TSLA and the overall market indexes like the Nasdaq 100 ($NDX) or the S&P 500 ($SPX). Weakness in either would be a reason to protect gains quickly. High momentum stocks can struggle and pull back quickly if the indexes lose underlying support. 

Good trading,

Greg Schnell, CMT

Is Abercrombie And Fitch (ANF) Doing Some Heavy Lifting?

As retail starts shining with Back-To-School and the early ramp into US Thanksgiving and Christmas, the Consumer Cyclicals sector is in prime focus. Abercrombie And Fitch Co. (ANF) is an apparel retailer associated with a younger demographic. 

For those of you at Chartcon, in the presentation on the SCTR, I mentioned the SCTR kickoff that starts to say the sentiment is changing in the stock.  This is a great example. The SCTR started to perk up, but the stock was still migrating from a downtrend to an uptrend. Now as it starts to make higher highs, it is becoming one of the top performing stocks in the mid cap apparel retailer industry group. Nothing is surging on the other indicators but the stock made its low right around Christmas last year and the management seems to be changing things up as the investor community is starting to push it to higher highs and lows.

The recent bounce off the 40 WMA or 200 DMA is pretty important support and the MA's are bullish with the 10 WMA above the 40 WMA. The current price is just under the top horizontal resistance line. A break through here suggests higher ground. There is one other elephant in the room. The massive blue thousand day downtrend. A break through that line which is at the same level as the current price would mark a significant trend change.

After watching two teenage daughters shop for back to school over the years, I am pretty quick to ask them what they think about an apparel retailer. Now they are in their University years. The youngest one said,  "Yes Dad, I plan to do some back-to-school shopping at Abercrombie." She hasn't said that in a couple of years. One buyer might not be a trend change, but it might be a clue that attitudes are changing towards the local ANF store.

It reminds me of all those songs about blue jeans that made it to the top of the charts, but that's another chart list!

Good trading,

Greg Schnell, CMT

 

 

Priceline (PCLN) Moves Above The Line

After a fantastic Chartcon 2014 conference with technicians, we are all fired up to find the best stocks with the best tools. With all of the attendees travelling from multiple countries and continents, looking at Priceline (PCLN) seems only fitting today.

Dick Arms created a new style of candle that includes volume but also builds on the intra day trading range. StockCharts launched this new candle style last fall and Dick took a seat in the middle of the audience at Chartcon 2014 to walk us through his logic on the candle and why he thinks it is revolutionary and potentially the most powerful charting bar or candle for giving you insight to the power behind the price action and it is displayed on the price part of the chart.

First of all the SCTR ranking has moved into the top quartile for the large cap sector. That is very powerful when we see the candle that pushed the SCTR into a top quartile ranking. PLCN has also broken above a 6 month base and while the S&P 500 ($SPX)  shown in black was pulling back the last few weeks, Priceline continued to the upside. With the broad market rally on Friday, PCLN pushed through resistance on a week with high volume. The candle is very wide and the price is at a critical resistance line. It closed Friday just above previous weekly close resistance. What makes this CandleStyle so compelling is it really shows how big a week it was for PCLN even though it did not close the week at the highs. The volume has been rising week to week without looking at the volume bars below. Some of the indicators below confirm the price action as the 20 week CMF is seeing improving money flow, and the RSI is still in bull mode. 

Normally I would not post the volume the old way under the candles with this Arms CandleVolume chart, but in this case, the width of the candle on the price is important when you see the price opened on the low of the week and on higher volume pushed above resistance. This candle width displayed to the top of the trading range makes the candle look huge. Without the box width, it would have looked relatively weak. The volume candles below the price do not demonstrate the power in the candle as it looks similar in height to the last few months. (The volume bars below are only wider because of the candle style chosen.) Today's candle is thin because it only has this mornings volume in it, compared to a full week for the other candles. The candle closing out last week demonstrated big volume as it accelerated through previous resistance. Now it is also moving into a top ranked SCTR which is a blend of powerful dynamics with institutional investors.

I realize the price is $1300/ share but there are options available on PCLN so I though it was worthwhile to demonstrate the signal strength from the Arms CandleVolume ChartStyle. By continuing the box width to include the tail and the spire, it puts more meaning on how important the week was in terms of price action. For more information on the Candle style, the ChartSchool article has all the information. You can find it on this link as well. Arms CandleVolume

Here are my chart settings where you can see the 'Type' is set to Arms CandleVolume.

Good trading,

Greg Schnell, CMT

 

Boeing Hits Big Support Zone and Becomes Oversold

It has been a rough year for Boeing, but the stock may be poised for an oversold bounce. After a big plunge in January, the stock firmed for a few months and then worked its way higher in April-May. BA peaked in early June and fell back to support over the past week. Notice that RSI dipped below 30 for the first time since early February. The stock is still in the falling knife category, but is ripe for at least an oversold bounce. Watch this week's high for a short-term breakout. 


Click this image for a live chart

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