Don't Ignore This Chart

BLUE Looking At Blue Skies Ahead?

Biotechnology stocks ($DJUSBT) were the second best performing industry group last week, trailing on renewable energy ($DWCREE).  Both groups appear poised to continue their rally based on their longer-term weekly technical outlook.  Therefore, it's probably not a bad idea to look at stocks in these groups that pull back to find critical price support levels from where they're likely to continue their push higher.  Bluebird Bio (BLUE) had a rough Friday (-5.49%) after a huge advance 60% advance over the three prior weeks.  For short-term aggressive traders, keep an eye on the following key levels:

The two green arrows mark what I consider to be the best support levels.  On Friday, BLUE's intraday low of 104.90 tested the rising 20 day EMA.  That moving average, along with price support near 98 should provide entry points for longs.  The initial target would be a gap fill to Thursday's close at 118.50.

Happy trading!

Tom

BioMarin Next In Line For Breakout Among Biotechs?

BioMarin Pharmaceutical (BMRN), like the overall biotech industry ($DJUSBT), has struggled for the past 18 months to clear overhead price resistance.  But over the past couple trading sessions, we have seen one biotech company after another clear resistance on strong volume and accelerate.  It appears that BMRN is awaiting its turn.  While its gains this week have been strong, the best may await on a breakout.   Here's the longer-term weekly chart:

You can see that interest is picking up in BMRN as weekly volume is its highest in eight weeks to accompany a 9.7% move higher.  But a major breakout at 100 remains.  Money is definitely rotating towards biotech stocks and healthcare (XLV) as you can see that relative downtrend line (biotechs vs. S&P 500) has broken.  The XLV now has a SCTR reading of 95.6, the highest of any sector, and biotechs are the primary reason why as they've gained 7.66% as a group in the past week alone .  Given the weekly RSI and stochastic at 60 and 43, respectively, it would seem as if the BMRN party may just be getting started.  We do need that breakout on increasing volume to confirm, however.

Happy trading!

Tom



 

MACD Histogram Teeters as AT&T Breaks Wedge Line

Despite a strong stock market in 2017, AT&T ($T) is having a tough time with a breakdown in early May and a sharp decline below the 200-day SMA. The stock rebounded after a double-digit decline with a bounce back to the 200-day SMA, which is now falling. Thus, we can clearly say the long-term trend is down for this stock. Short-term, the rebound ended as the stock broke the wedge line and moved below support at 38.50. This signals a continuation of the prior decline and argues for further weakness, perhaps back to the November lows. 

Continue reading "MACD Histogram Teeters as AT&T Breaks Wedge Line" »

Clorox (CLX) Polishes A New High

Clorox (CLX) is a big Consumer Staples company showing off a new 52-week high this week. The breakout jumps above a 2016 top and a high touched in March 2017.

The volume has been tepid the last 4 or 5 weeks so that is a little concerning, but everything else on the chart looks polished!

Good trading,
Greg Schnell, CMT, MFTA

 

Breakout in Biotech SPDR Signals Trend Continuation

The Biotech SPDR (XBI) is starting to lead the market again with a consolidation breakout and 52-week high. The chart shows the ETF hitting an initial 52-week high in February and then consolidating for four months. It looks like this consolidation is ending and the bigger uptrend is resuming with this week's breakout. Using a parallel channel for a target, the upper trend line extends to the upper 80s by August-September. The indicator window shows the PPO(10,40,1) in positive territory since August 2016 and this confirms the long-term uptrend. 

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Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Cerner Corp Tests Key Price Support

It's always nice to go back to the basics of technical analysis.  Broken resistance becomes support.  That's currently the case with Cerner Corp (CERN) where the stock recently cleared price resistance just above 65.00 and, with recent profit taking, we've seen a return to that price support level.  There's also a nice 2017 uptrend in play that shows multiple touches and CERN is slightly above that trendline support as well.  Here's the chart:

Should 65 price and trendline support fail to hold, the next key level for CERN would be gap support just above 62.

Happy trading!

Tom

Would The Real Bank Trend Please Stand Up?

One look at the 10 year treasury yield's ($TNX) decline the past several months provides proof that the bond market isn't exactly agreeing with the Federal Reserve's stated position that they see economic improvement in the months ahead.  The Fed announced on Wednesday that it sees another rate hike in 2017 and further hikes in 2018.  That would suggest a strengthening economy.  Yet a strengthening economy should trigger the selling of treasuries and higher treasury yields.  But that has not been the case.  Who's right, the Fed or the bond market?

Continue reading "Would The Real Bank Trend Please Stand Up?" »

Celgene Holds Breakout Zone and Turns Up

Celgene (CELG) is a large biotech stock that is part of the Biotech iShares (IBB) and the Biotech SPDR (XBI). Overall, I would suggest that the long-term trend is up because the stock hit a 52-week high in mid-March and the 50-day EMA is above the rising 200-day EMA. The stock also broke out with a gap-surge in November and this breakout zone held (blue area). Also notice that a rising channel of sorts is taking shape since December. 

Continue reading "Celgene Holds Breakout Zone and Turns Up" »

Citi (C) Holds It's Breakout

Citi (C) rallied last week to push to new highs. This week, Citi is holding up with the Fed meeting tomorrow. The SCTR is close to moving into the top performing area above 75. 

The MACD is turning up above zero which is very bullish and Citi increased the dividend in July of 2016. Perhaps another dividend increase is in store.

Good trading,
Greg Schnell, CMT, MFTA

 

NUE Shows Early Signs of Ending its Correction $NUE

Nucor (NUE) is flat year-to-date and lagging the S&P 500, but the bigger trend is up and short-term momentum is turning up. The bigger trend is up because Nucor surged to a 52-week high in early December and the 10-week EMA remains above the 40-week EMA, even after the recent decline. Notice that this decline retraced around 50% of the prior advance and returned to the rising 40-week EMA the last few weeks. The retracement amount is typical for a correction, as is the dip back to the 40-week EMA. The PPO (5,30,5) show early signs of an upturn and NUE closed back above the 10-week EMA last week. These are the first signs that the correction is ending and a break above the April-May highs would complete the process. 

****************************************
Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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