Don't Ignore This Chart Blog Archives

April 2012

Consumer Staples Bullish% Index Shows the Most Strength

The Consumer Staples Bullish% Index ($BPSTAP) is the strongest of the nine sector SPDR Bullish Percent Indexes. It is interesting that the BPI for this defensive sector shows the most strength. In contrast, the Consumer Discretionary Bullish% Index ($BPDISC) is currently around 69%. You can read more in our ChartSchool article.

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Dow Bounces off Bullish Support Line on P&F Chart

The Dow Industrials remains in a long-term uptrend as it bounced off the bullish support line extending up from October 2011. This line and the April low combine to mark a key support zone in the 12850-12900 area. It would take a P&F print below the last O-Column would reverse this uptrend.

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Citrix Gaps Down after Shooting Star Candlestick

After hitting resistance in the 80-81 area in March, Citrix (CTXS) failed once again at this level with a shooting star candlestick last week. Notice the long upper shadow extending above 80. A down gap followed this bearish reversal candlestick and the next support zone resides around 71.

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Apple CCI Becomes Oversold for Third Time in Twelve Months

When it comes to the Commodity Channel Index (CCI), there is oversold and then there is OVERSOLD. Readings below -100 are average oversold, while anything below -200 is really oversold. For just the third time in twelve months, 20-day CCI for Apple moved below -200. Prior readings occurred in June 2011 and November 2011. Apple reports earnings on Tuesday.

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QQQ Remains within Falling Flag Pattern

The Nasdaq 100 ETF (QQQ) managed to firm after Monday’s sharp decline, but remains within a short-term downtrend defined by a falling flag. It would take a move above resistance at 67 to reverse this fall. Chartists can also watch for the Commodity Channel Index (CCI) for confirmation. A break above the March trendline would be the first sign of improving momentum.

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Biotechs, Internet and Networking Lead Market Higher

The Sector Market Carpet shows big gains in three stocks powering these industry groups. EBAY is up over 15% and leading the internet group. FFIV is up over 13% and leading the networking group. Both groups are part of the technology sector. GILD is up over 10% and leading the biotech group, which is part of the healthcare sector.

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Morgan Stanley Consolidates at Support

Morgan Stanley fell to support with a sharp decline from late March to early April and then consolidated the last eight days. While the stock market bounced, MS remained flat and is lagging the market the past week. Watch the consolidation boundaries for the next directional signal.

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Sector Summary Shows Coal Leading the Energy Sector

The Industry Summary page provides chartists with an easy way to view performance for the nine big sectors and the industry groups that make up these sectors. The image below shows DJ US Coal Industry Index ($DJUSCL) leading the energy sector with a 4 plus percent gains. Chartists can click on the industry group name to see the stocks within this group.

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Transport iShares Bounces off Range Support

With a bounce the last four days, the Transport iShares (IYT) held support from the early March low and remained range bound. Notice how the ETF has traded between 89.7 and 96 since mid January. Chartists should watch this range for the next directional signal. 

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Hewlett Packard Gaps Up on Big Volume

After falling out of favor in February and March, Hewlett Packard found support around 23 and gapped up on Thursday. Notice that the stock opened strong, moved higher throughout the day and closed strong. This gap looks like a breakaway gap that is confirmed by strong volume.

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German DAX Tests March Low

With a sharp move lower the last five days, the German DAX Index ($DAX) is testing support from the March low. In fact, support in the 6600 area extends back to early February. A break below this support level would suggest an even deeper correction that could weigh on US stocks.


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Priceline Forms Bearish Engulfing on High Volume

Priceline has been one of the top performers over the last four months, but a correction may be in the cards after a high-volume bearish engulfing pattern. Notice how the stock opened above the prior close and then declined to close below the prior open. The strong open failed to hold as the prior candlestick was completely engulfed. You can find more of these patterns on a predefined scans page.

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High-Yield Bond ETF Breaks March Low

The chart below shows the High-Yield Bond ETF (JNK) breaking below its March low with a sharp decline the last eight days. This is negative for stocks because junk bounds and stocks tend to move in the same direction. Notice that the Correlation Coefficient (JNK, $SPX) has been mostly positive the last six months.

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Finance Sector Has a Rough Week

The nine S&P Sector SPDRs were mixed last week with the defensive sectors scoring gains and the offensive sectors under pressure. The PerfChart below shows the consumer staples, healthcare and utilities sectors gaining for the week, while the fiance, industrials and tech sectors lost ground. With a 2.11% loss, the finance sector was hit especially hard.

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Gold Miners ETF Breaks Down Further

After forming a broadening formation in 2011, the Gold Miners ETF (GDX) broke down with a sharp decline the last six weeks. GDX broke support from the 2011 lows and the next support zone resides in the 47.5 area. The indicator window shows GDX relative to GLD using the price relative (GDX:GLD ratio). GDX has been underperforming gold for over a year.

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Networking iShares Break Channel Support

The Networking iShares (IGN) shows relative weakness with a lower high in March and channel break the last few days. Relative weakness is also reflected in the price relative (IGN:SPY Ratio), which did not come close to its February high and remains in a downtrend.  

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Dollar Bullish ETF Surges off Support

The chart below shows Dollar Bullish ETF (UUP) hitting support in the 21.8 area and surging the over 1% the last two days. Notice that UUP formed a higher low above the late October low and this surge could signal a continuation of the November-December advance.

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A Bollinger Band Squeeze for Procter & Gamble

After a big surge in February, PG moved into a trading range and the Bollinger Bands contracted significantly. This “squeeze” means volatility is contracting, which in turn could foreshadow a volatility expansion (range break).  A close above the upper band would be bullish, while a close below the lower band would be bearish.

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New Sector Summary Features Leads to the Strongest Performers

The new SCTRs feature at is great for finding stocks that are doing well based on a wide variety of technical factors however sometimes you want to focus in on performance.  We've all heard it before - "Buy the strongest stocks in the strongest industries in the strongest sector" - but how do you find those stocks?  Enter the StockCharts Sector Summary.

I'll let you click around in there on your own and see what is currently doing well.  It is pretty straighforward.  To find the strongest of the strong, simply click on the top item until you can't drill down any more.  When I did that this morning, I got PLG.  Here's the chart:

(Click the chart for a live version)

Definitely headed in the right direction although the support from the 50-day MA needs to push it out of the trading range it was in for most of March.

Anyway, enjoy the new Sector Summary feature and watch for additional improvements to appear in the coming days and weeks.

- Chip


Consumer Staples Sector Hits 52-week High

Even though it may be lagging the S&P 500 ETF (SPY) on a percentage basis, the Consumer Staples SPDR (XLP) is leading the market on a “chart” basis with a 52-week high. In fact, there have been a string of 52-week highs since the latter part of February. Also note that the surge over the last two days was especially strong.

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