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Google Hits Key Retracement with RSI Divergence

by Arthur Hill

Google ($GOOG) has been trending lower since mid January, but support may be at hand in the 515 area. Broken resistance and the 62% retracement combine to mark support here. Also notice that RSI has a bullish divergence working the last few weeks. Read More 

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Baidu Firms at Broken Resistance Zone

by Arthur Hill

A basic tenet of technical analysis is that broken resistance turns into support. Biadu broke two resistance levels and these combine to form a support zone. With the stock firming the last two week, watch for a bounce above the mid May high to reverse the May slide. Read More 

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Microsoft Traces out an Island Reversal

by Arthur Hill

With a gap down, three day stall and gap up, Microsoft (MSFT) forged a bullish island reversal. Technically, the high of the 3-day consolidation is 24.31 and today’s low is 24.32. The gap zone is one cent. Nevertheless, the essence of a island reversal is there. Read More 

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Renko Chart Shows a Clear Level to Beat for DIA

by Arthur Hill

Renko charts filter out the noise by requiring minimum price moves before the plot changes. This Renko chart shows the Dow Industrials SPDR (DIA) based on closing prices with 50 cents as the minimum move. A clear decline has taken shape in May with resistance at 125. Read More 

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F5 Networks Gets Sandwiched Between Two Key Moving Averages

by Arthur Hill

F5 Networks (FFIV) first broke below its 50-day SMA in January and then its 200-day moving average in March. The stock recovered with a break back above the 50-day in May, but has yet to reclaim the 200-day. The next moving average to break could hold the key to the next significant move. Read More 

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The Netherlands and Greece Show Relative weakness in Europe

by Arthur Hill

The PerfChart shows the year-to-date performance for six European stock indices. Surprisingly, the Italian Milan Index ($MIB) is the best performing. Germany is a close second though. It is also surprising to see the Netherlands Index ($AEX) down for the year and showing relative weakness. Read More 

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S&P Sector Carpet Shows Red in the Consumer Discretionary Sector

by Arthur Hill

The consumer discretionary sector is seeing serious red over the last two days. The S&P Sector Carpet shows 2-day price performance for various stocks in the nine sectors. Four of the five weakest stocks come from this most economically sensitive sector. Namely, retailers were weak the last two days. Read More 

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Dollar General Set to Appear on Bearish Engulfing Scan

by Arthur Hill

With a strong open and decline into the close, Dollar General (DG) is set form a bearish engulfing pattern with a long upper shadow. This is the third such pattern in the last two months. Watch the trendline extending up from the March low for a break to confirm this pattern. Read More 

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Shanghai Composite Firms at Key Retracement

by Arthur Hill

With a 6.5% decline from its April high, the Shanghai Composite ($SSEC) has been one of the weaker world indices this spring. Despite relative weakness, the index is trying to firm in a support zone that centers around the 62% retracement. Last week’s high marks the first resistance level to watch. Look for a move above 2900 to forge a breakout. Read More 

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A Cluster of Long White Candlesticks for ASEI

by Arthur Hill

American Science and Engineering ($ASEI) broke support at the beginning of May, but the bulls are not giving up easily as the stock formed at least four really long white candlesticks since then. A long white or hollow candlestick indicates that the close is above the open. These candlesticks reflect rather strong advances after the open. A move above 89 would break near term resistance. Read More 

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Steel ETF Tests Double Top Low

by Arthur Hill

The Steel ETF (SLX) traced out a double top with two relatively equal highs this year. The intermittent low formed in March to mark key support for this pattern. SLX closed right at this low on Friday for an important test. A break below this level would confirm the double top and target a move to 59-60 area. Read More 

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Energy Sector Weighs on Amex in May

by Arthur Hill

Of the five broad market indices, the Amex is the weakest due to declines in energy related shares this month. The Amex is heavily weighted towards the energy sector. The NY Composite ($NYA) is the second weakest index. $NYA is heavily weighted towards the finance sector, which has also been weak in May. Read More 

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Parallel Aroon Indicators Reflect Consolidation in LMT

by Arthur Hill

Even though Lockheed Martin (LMT) edged higher the last few weeks, both Aroon Up (green) and Aroon (down) moved lower. Also notice that they are parallel and relatively close together. This affirms the consolidation in LMT. The first indicator to move above 50 will trigger the next signal. You can read more on Aroon in our ChartSchool article. Read More 

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FTSE Forms Inverse Head-and-shoulders Pattern

by Arthur Hill

The London FTSE 100 ($FTSE) found support near its January-February lows over the last few weeks. With a deeper dip in March, an inverse head-and-shoulders pattern is taking shape in 2011. A break above 6100 (neckline) would signal a continuation higher. Read More 

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Commodity ETF Gets Oversold Bounce off Support $DBC

by Arthur Hill

After becoming oversold last week, the DB Commodity Index Fund ($DBC) bounced off support with a long white candlestick. Notice that an inverted hammer formed on Friday as RSI dipped below 30 (oversold). Broken support turns into the first resistance area around 30.50. Read More 

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Energy Goes from Leader to Laggard $XLE

by Arthur Hill

The Energy SPDR (XLE) is still one of the leading sectors in 2011, but the ETF has started showing relative weakness over the last 30 trading days. The PerfChart below shows XLE as the weakest of the nine sectors since March 25th. All sectors are up, but XLE is down almost 5%. Notice that the three defensive sectors are leading sine March 25th. Read More 

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SPY on the Verge of Weekly Bearish Engulfing Pattern

by Arthur Hill

With a strong open on Monday and weakness the rest of the week, the S&P 500 ETF (SPY) formed a long black candlestick that engulfed the prior white candlestick. The week is not yet finished because Friday remains. A close below last week’s open would forge a weekly bearish engulfing. A close below the mid point of last week’s body (135.055) would forge a dark cloud pattern. Read More 

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Euro Plunges after New High

by Arthur Hill

The Euro Currency Trust (FXE) hit a new 52-week high Wednesday, but gave it all back with a sharp decline early Thursday. As of 11AM ET Thursday, FXE is down around 2% from Wednesday’s high. That’s quite a drop. Support, however, is near as the ETF closes in on the January trendline and broken resistance. Read More 

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Hanging Man and Bearish Engulfing Weigh on XLF

by Arthur Hill

After a bounce off support in April, the Finance SPDR (XLF) came under pressure with a hanging man at the end of April and a bearish engulfing at the beginning of May. These two bearish candlesticks affirm resistance from the early May high. It is possible that a falling flag is taking shape, but a break above the bearish engulfing high is needed to reverse the slide. Read More 

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HBAN Battles Resistance with a little Relative Strength

by Arthur Hill

After going nowhere for two months, Huntington Bancshares (HBAN) is once again battling consolidation resistance. The stock has been stuck between 6.3 and 6.9 since the beginning of March. With the market down sharply on Tuesday, the stock is showing some resilience with a small gain. A break above the April high would be bullish. Read More 

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Bearish Engulfing Patterns Pile up for $CHK

by Arthur Hill

After surging in late February, Chesapeake (CHK) worked its way lower with three bearish engulfings and a dark cloud pattern. The April bounce above 33.5 may be stymied as the stock formed another bearish engulfing on Monday. Check out our bearish engulfing scan for more. Read More