Don't Ignore This Chart

September 2009

Don't Ignore This Chart

Money Flows Near Zero for Apple

by Arthur Hill

Chaikin Money Flow for Apple (AAPL) has been positive from mid July to late September. There was a brief dip into negative territory last week, but Chaikin Money Flow recovered on Monday. Nevertheless, the 5-day SMA of the indicator is perilously close to turning negative for the time since July.  Click this image for more details. Read More 

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Getting out of the "Zone"

by Tom Bowley

Autozone (AZO) is setting up rather bearishly in a bear flag formation.  Divergences on the MACD within the retail space are weak at best and AZO has been a relative underperformer with its MACD unable to climb above the centerline, one of the few stocks having that difficulty.  Watch the volume because if the bear flag breaks to the downside on increasing volume, the resulting losses measure substantially lower.  - Tom Bowley, InvestedCentral.com Read More 

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A Bullish PnF Chart for Activision

by Arthur Hill

This long-term PnF chart for Activision extends back to 2003 when the stock was trading in the low single digits. After rising above 19, the stock went into corrective mode in 2008 and broke out in 2009. With the May-June (5-6 on the chart) breakout, ATVI has a bullish price objective of 22.5. Click this chart for details. Read More 

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China and Japan Lag

by Arthur Hill

Since early July, the Shanghai Composite ($SSEC) and the Nikkei 225 ($NIKK) have been lagging western European stock markets and the US. The PerfChart below shows the Shanghai Composite is actually down since July and the Nikkei is barely positive. In contrast, the US and western European indices are up over 15%. Click this chart for details. Read More 

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A Bollinger Band Contraction for Intel

by Arthur Hill

Bollinger Bands have been contracting as Intel (INTC) consolidates over the last few weeks. The theory behind Bollinger Bands is that volatility contractions often give way to volatility expansions. Look for a range break to trigger the next directional signal. Click this chart for details. Read More 

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An Outside Reversal Day for SPY

by Arthur Hill

The bears were given something to chew on with an outside reversal day for SPY. First, a reversal formed when Wednesday’s high was above Tuesday’s high and Wednesday’s close was below Tuesday’s close. Second, an outside day occurred because Wednesday’s high was above Tuesday’s high and Wednesday’s low was below Tuesday’s low.  Click this image for more details. Read More 

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New Highs Outpacing New Lows

by Arthur Hill

The predefined scan page provides a quick glimpse of underlying strength or weakness in the stock market. At the top of this page, new 52-week highs are comfortably outpacing new 52-week lows. Click the number (129 Nasdaq and 163 NYSE) to see a list of market leading stocks. Click this image for more details. Read More 

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QQQQ Hits Prior Support Zone

by Arthur Hill

Broken support turns into resistance. This basic tenet of technical analysis will be getting a test as the Nasdaq 100 ETF (QQQQ) reached broken support. For now, I would consider this “potential” resistance because the trend since March is clearly up. Click this chart for details. Read More 

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XLY Becomes Overbought and Stalls

by Arthur Hill

The Consumer Discretionary SPDR (XLY) surged over 10% this month and then stalled with two doji at the end of last week. These candlesticks signal indecision that can foreshadow a short-term pullback. Also notice that 14-day RSI moved above 70 to become overbought for the first time since early August. Click this chart for details. Read More 

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Precious Metals Lead Rydex Funds

by Arthur Hill

The Rydex Mutual Funds Market Carpet focuses on the 17 sector funds. September is all about hard assets. The leading sector funds are precious metals, energy services, basic materials and energy. Consumer produces, utilities and healthcare show the smallest gains. Click this chart for details. Read More 

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Lowe’s is Lagging

by Arthur Hill

While the stock market moved higher the last two weeks, Lowe’s (LOW) failed to break above resistance at 22 and showed relative weakness. A potentially bullish ascending triangle is taking shape, but a breakout is needed for confirmation. Conversely, a break below this week’s low would be bearish for the stock. Click this image for more details. Read More 

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A Bullish Start on Wednesday

by Arthur Hill

A look at the Market Summary page on Wednesday, September 16th, at 11:14AM ET shows a bullish start for some key sector SPDRs. The Materials SPDR (XLB), Consumer Discretionary SPDR (XLY), Energy SPDR (XLE) and Financials SPDR (XLF) are all up over 1% in early trading. At the top of this page, user can change the settings to show intraday or end-of-day data   Click this image for more details. Read More 

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IYZ Challenges Resistance

by Arthur Hill

The iShares Telecom ETF (IYZ) is challenging neckline resistance of an inverse head-and-shoulders pattern. The head-and-shoulders represents a big consolidation and the break to new highs is positive. However, declining volume on the Aug-Sep advance is a concern. Click this chart for details. Read More 

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PnF Objective is Bullish for Gold

by Arthur Hill

The Point&Figure chart for the Gold ETF (GLD) is bullish with an upside target at 105. PnF Charts at Stockcharts.com show bullish or bearish price objectives above the chart on the left. GLD broke above its prior highs and clearly shows strength. Click this chart for details. Read More 

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FXB Gets A Momentum Surge

by Arthur Hill

The British Pound ETF (FXB) came across the Commodity Channel Index scan as the indicator surged above 100. While some may consider CCI overbought when above 100, it is also a show of strength when CCI moved from -100 to +100 in less than two weeks.  Click this chart for details. Read More 

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XLE Hits Resistance

by Arthur Hill

The Energy SPDR (XLE) broke above wedge resistance with a big gap on Tuesday, but formed a shooting star candlestick on the day. Notice the spike and failure to hold above 54 intraday. Resistance in the 53-55 area is also confirmed by a bearish engulfing in late August. Click this image for more details. Read More 

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Net New Highs Stay Positive

by Arthur Hill

Net New Highs for both the Nasdaq and the NYSE remain positive. Net New Highs equals new 52-week highs less new 52-week lows. The last dip into negative territory occurred in early July. With Tuesday’s surge, Net New Highs on the NYSE hit +151 and Net New Highs on the Nasdaq reached 70. You can click the image to see the details. Click this image for more details. Read More 

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Identifying the Cup with Handle Formation

by Tom Bowley

The cup with handle formation is a powerful continuation pattern.  A prior uptrend must exist in order to rely on the cup with handle pattern.  Below are two examples of cup with handle patterns that show the cup formation and the powerful breakout moves.  In the case of ADSK, we've recently seen a retracement to the breakout area, which provides another entry point for the trader.  KOG was highlighted in our Chart of the Day section less than two weeks ago while still in the handle part of the pattern.  The breakout moves in both cases were explosive.  Check Read More 

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A Cup-with-Handle for SLX

by Arthur Hill

After a big advance from March to June, the Market Vectors Steel ETF (SLX) formed a classic cup-with-handle pattern. This is a bullish continuation pattern that would be confirmed with a break above rim resistance. Conversely, a break below the August lows would call for a reassessment. Click this chart for details. Read More 

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Lumber Forms Lower High

by Arthur Hill

Lumber Continuous Futures ($LUMBER) did not have a good August. Lumber formed a lower high in early August and moved lower throughout the month. As a key component in housing, lumber should be watched for clues on the homebuilders and the economy. Other futures contracts available at Stockcharts.com include $ALUM, $GASO, $GOLD, $HOIL, $LUMBER, $NATGAS, $SILVER and $WTIC. Click this chart to see more details. Read More 

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XLB Tests Support

by Arthur Hill

After breaking above resistance in July, the Materials SPDR (XLB) moved into a holding pattern as broken resistance turned into support. Notice how the ETF bounced off 28.5 in mid August and is testing this level again in early September. A move below support would show weakness.   Click this image for more details. Read More 

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Info from the Bollinger Band Scan

by Arthur Hill

Stockcharts.com provides a number of pre-defined scans using classic indicators. In particular, I always keep an eye on the Bollinger Band scan that shows stocks moving above their upper band and stocks moving below their lower band. Selling pressure is picking up as many more stocks moved below their lower band on Tuesday, September 1st. Click this image for more details. Read More 

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Financials Back in Spotlight

by Arthur Hill

A look at the Market Carpet on Tuesday (11AM ET) shows the finance sector with the most red. In addition, four of the top five losers in the S&P 500 come from the finance sector. Notice the numbered red squares (2-5). Technology is holding up the best with the average stock showing a small gain. Click this chart to see more details. Read More