Don't Ignore This Chart

February 2014

Don't Ignore This Chart

National Oilwell Varco and Two Others Make Big Moves in Relative Strength

by Arthur Hill

The first image shows a screen shot from the StockCharts Technical Rank (SCTR) sorted by change to highlight the biggest movers. Three of these show big moves from relatively low levels (TGT,EW,NOV). Big moves mean something is happening and we should check the charts. The second image shows NOV finding support near broken resistance and breaking the November trend line. Read More 

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Chinese E-Commerce Stock Goes for a Breakout

by Arthur Hill

Shares of Dangdang ($DANG) are making a big move this month with a triangle breakout on expanding volume. First, notice how the stock surged from ~4 to ~12. Second, the triangle consolidation worked off overbought conditions. Third, the high volume breakout signals a continuation of this advance. Careful with this one: low-price times internet-play times Chinese-stock equals risk cubed. Read More 

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When An Important INDEX Has A 2% ATR - Average True Range

by Greg Schnell

The $INDU rose over 200 points on Monday and settled back to keep about 1/2 the day's gain. This was a 200 point range or over 1% for the day. In North America we consider that to be a meaningful big day. With the Dow around 16000, a 1% day is 160 points, a 2% day is 320 points and a 3% day is 480 points. Watching the $NIKK (Japanese Equity Market Index) is not exactly calming. Within the last year the ATR has been higher than 3% / day! This chart is a great example of how the ATR can also be used to help measure volatility and help with recognizing trend change. When the Read More 

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20+ YR T-Bond ETF Bounces off 200-day Moving Average

by Arthur Hill

Treasuries caught a bid as the 20+ YR T-Bond ETF (TLT) surged almost 1% and the 10-YR Treasury Yield ($TNX) fell back to 2.7%. Both are above their 200-day moving averages, but TLT is bouncing off the 200-day and $TNX falling towards the 200-day. Put another way, TLT successfully tested this key average and $TNX is poised to break it. Read More 

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Asset Managers, Investment Services and Banks Lead Finance Sector

by Arthur Hill

The bulls lifted the Finance SPDR (XLF) with the DJ US Asset Managers Index, the DJ US Investment Services Index ($DJUSSB) and the DJ US Bank Index ($DJUSBK) leading the charge. All three were up more than 1%. Users can click on the industry names to see the stocks in that group and click on the link at the bottom to see the complete industry group listing. Click this image for a live table Read More 

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Rydex Funds Highlight Industry Group Winners and Losers

by Arthur Hill

Stocks moved higher this week, but not all groups participated. As the Rydex industry fund MarketCarpet shows, the Financial Servives Fund (RYFIX) and the Banking Fund (RYKIX) declined and underperformed the market.  On the leadership and relative strength side, the Biotech Fund (RYOIX) and the Healthcare Fund (RYHIX) show the biggest gains. Note that the default Rydex MarketCarpet shows all funds. Double click any box focus on that specific group of funds. You can learn more about our MarketCarpets in this video tutorial. Read More 

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The Squeeze is on for Emcore Group $EMKR

by Arthur Hill

The Bollinger Bands are narrowing for Emcore (EMKR) as the stock moves into a tight consolidation. The indicator window confirms as BandWidth dipped to its lowest level in over six months. This volatility contraction could give way to a volatility expansion. A move above 5.05 would trigger an upside breakout, while a move below 4.6 would break support. Careful here: low price equals high risk. You can learn more about Bollinger Bands in our ChartSchool.  Read More 

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$SSEC Tests Downsloping 200 DMA

by Greg Schnell

The $SSEC (Shanghai Composite) has been in a funk since 2011. It is approaching a meaningful area to look for a bullish reversal of the downtrend. As technicians, this is where we would expect to see the behavior change. The Shanghai is testing the downsloping 40 WMA shown in green. As you can see, we have been here before. However, the negative momentum seems to have wained and the MACD is just points away from a bullish cross.We can see a series of higher lows on the MACD. We can also see the March Read More 

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Intel Bounces on Low Volume and Underperforms

by Arthur Hill

The stock market surged over the last few weeks with the Nasdaq 100 leading the way. Intel also moved higher, but lagged as the price relative (INTC:$SPX ratio) hit a new low for the year this week. Also notice that the bounce occurred on very low volume and Intel is nearing a resistance zone from broken support. Read More 

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Google, Apple and Microsoft Power QQQ in February (video)

by Arthur Hill

The CandleGlance charts show the Nasdaq 100 ETF (QQQ) and its top five components (the video shows the top ten components). It is easy to see why QQQ is so strong. Google hit a new high above 1200 today, Apple is up 10% from its January low and Microsoft hit a new high for the year. Amazon is the big laggard as a bearish pennant takes shape. Click this image for a live CandleGlance chart Read More 

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SCTRs Surge for HMO Stocks

by Arthur Hill

The StockCharts Technical Rank (SCTR) shows relative performance for the S&P 500 stocks, S&P SmallCap 600 and S&P MidCap 400. Stocks with the highest values show the most relative strength. The screenshot below shows the S&P 500 stocks with the biggest positive change in their SCTR. Notice that three HMO stocks feature on this list. Also notice that a few energy names grace the list. Click this image for a live table Read More 

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Utilities are Leading the Market in 2014

by Arthur Hill

The screen shot below comes from a ChartList viewed in "summary" format using a one month price change. Overall, the market is quite mixed with five of the sector SPDRs down over the past month and only four up. The Utilities SPDR (XLU) and the Utilities Equal-Weight ETF (RYU) are easily outperforming the others. Technology and healthcare are also performing well. Click this image for a live sector PerfChart Read More 

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Amazon Starts Acting like a Retail Stock (video)

by Arthur Hill

Amazon (AMZN), the biggest internet retailer in the world, was immune to weakness in the retail group for most of January, but finally broke down with a break away gap. After an oversold bounce above 360, the stock is continuing lower today with a move below 350. The rising 200-day moving average and broken resistance levels mark the next major support zone around 310-320. Read More 

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View RSI on Steroids in the Market Carpet

by Arthur Hill

Looking for the big momentum movers? Check out the MarketCarpet using StochRSI in change mode. StochRSI is the Stochastic Oscillator applied to RSI, which makes it RSI on steroids. Clicking the change icon at the top shows the big movers. Today, we are seeing NE, CNX and GS with upside momentum surges, while ZTS, HCP and OMC show strong moves in downside momentum.  Click here for instructions. Read More 

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Altera Leads with New High for 2014

by Arthur Hill

Altera, which is part of the semiconductor group, is showing relative strength this year with a price breakout and new high for the year (2014). The stock established support from mid November to mid January and broke out with a gap in January. After some backing and filling, the stock continued higher with another big move the last three days. The indicator window shows the price relative (ALTR:$SPX ratio) moving to a three month high. Read More 

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The Bond Ratio Breaks Down

by Greg Schnell

Weekends give us the time to flip through a lot of random charts. One of my favorites is ratios of different asset classes. This one has been very informative. SOme would say the trend lines are to steep. Look at the chart and then we can decide. Whether we use the trendline or the red moving average (20 WMA), this chart has indicated a very good place to be aware of sharp declines.  I'll be watching for the move up in equities to run out of steam. Somewhere around the 1810 area is a good technical level, but maybe it has more power than I imagine. This chart Read More 

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An Energy Infrastructure ETF Breaks Out

by Greg Schnell

The master limited partnership investment strategy usually has consistent cash flows. Here is an interesting ETF that holds 25 Infrastructure MLP's. This could be considered a defensive area but it still had 18% gains last year. You can see in the SPURS (Purple shaded area behind the RSI), this stock underperformed since last July. The MACD has gently pulled back. This would appear to be the second week the stock held above the breakout area. That is a change in behavior as all the other breakouts failed on the second week.  The SCTR is getting to a decision Read More 

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Bullish Candlesticks Line up for a Reversal in XRT

by Arthur Hill

After a plunge below 78 to start the week, the Retail SPDR (XRT) firmed with a harami on Monday-Tuesday and then formed a hammer on Wednesday. These are bullish candlestick reversal patterns that require confirmation, which came with a gap and surge to 80. Even though the short-term reversal is in, the overall trend is still down after the January breakdown and big decline. The 50% retracement marks the first resistance zone in the 82.5-83 area. Read More 

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Palo Alto Networks Resumes Uptrend with High Volume Signal

by Arthur Hill

Network security company Palo Alto Networks is resuming its uptrend with a flag breakout on twice its average volume. PANW surged to a new high earlier this year and pulled back with a flag the last few weeks. Notice that broken resistance turned into support in the 58 area. The stock firmed with a harami on Monday-Tuesday and broke out on Thursday. This breakout signals a continuation of the bigger uptrend and projects a move to new highs. Read More 

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The Very Big Picture - $SPX 20 Year Monthly Chart

by Greg Schnell

We always focus on the shorter term charts, but the big institutions focus on Monthly and Quarterly charts. Looking at the long timeline, the chart reveals some interesting trend lines. Lines of the same color are also the same slope. Currently the 2011 to 2014 run is the same slope as the 1990's slope. For 2007, you will notice two different slopes. The red trendline would have stopped you out much closer to the top. The green trendline would have kicked you out much lower but only a few months different. So in both of the previous major market tops, the steep slope trend Read More 

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Edwards Follows through on Candlestick Reversal Pattern

by Arthur Hill

Edwards Life Sciences (EW) has been underperforming the biotech group for over a year, but the stock showed signs of buying interest with a bullish engulfing on high volume and follow through surge on Wednesday. Also note that support in the 65 area extends back to May and the stock formed a higher low by remaining above its December low. Check the predefined scans page for more signals. Read More 

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Sector MarketCarpet in RSI Mode Reveals Most Oversold Stocks

by Arthur Hill

Stocks took a beating over the last few weeks, and some more than others. The Sector MarketCarpet below reflects the absolute value for RSI on February 3rd. Stocks with low RSI values have dark red squares, while stocks with relatively high values have green squares. Most of the green can be found in the utilities sector. The red is a bit scattered with some of the lowest levels found in the consumer discretionary sector. RSI is great indicators for finding oversold stocks and stocks that are bucking the trend. Click here to learn more about MarketCarpets. Read More 

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LinkedIn Tests Key Moving Average with Bullish Candlestick Pattern

by Arthur Hill

It has been a rough few months for LinkedIn as the stock fell from the 255 area in September to the 200 area in early December. The stock, however, is finding some support near the rising 200-day moving average with a big bullish engulfing. After a pullback in mid January, LinkedIn is again trying to hold this key moving average with a surge the last three days. The indicator window shows the MACD Histogram turning positive on Monday. Earnings are scheduled for February 6th. Read More