Don't Ignore This Chart

December 2014

Don't Ignore This Chart

FLEX Forms Big Continuation Pattern

by Arthur Hill

Flextronics (FLEX) hit a 52-week high in June and then formed an extended consolidation that looks like an inverse head-and-shoulders pattern. It is not picture perfect, but the "essence" of the pattern is there. There is a prior uptrend, a left shoulder dip, a deeper dip for the head and a right shoulder dip. The red area marks neckline resistance and a break above 11.50 would confirm this pattern. Note that I made a judgment call and drew through the September spike. Also note that On Balance Volume (OBV) is bullish because it broke out in late October.  Read More 

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Fossil (FOSL) - Is This The Time To Watch?

by Greg Schnell

Fossil (FOSL) is an interesting chart as we head into the newest Apple product launch in 2015, the Apple Watch. While the trail of punished companies that thought they would be able to compete with Apple's depth is long, it always seems to take trusting shareholders by surprise. The Watch is something different for Apple and the entire watch industry will be on alert for tell-tale signs of plummeting demand. So far, all of the competitive products have not really changed the watch business, but Apple's complete eco system is what makes the upcoming Apple Watch so hard to Read More 

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Equal-weight S&P 500 Outperforming Cap-weight S&P 500

by Arthur Hill

The chart below shows the ratio of the S&P 500 Equal-Weight Index to the S&P 500 ($SPXEW:$SPX). Also known as the price relative, this ratio chart compares the performance of the S&P 500 Equal-Weight Index to the S&P 500. $SPXEW outperforms $SPX when this ratio rises and underperforms when this ratio falls. As we can see on this chart, the equal-weight index has been outperforming the cap-weight index since mid October. This is positive for the broader market because it shows relative strength in the "average" stock in the S&P 500. In other words, this rally since Read More 

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$NATGAS Loses Some Heat

by Greg Schnell

$NATGAS had been struggling to hold up in the wake of the recent energy downturn, but in the last week pricing fell apart. After a vertical climb from the very low $1.90 level to a soaring $6.40, Natural gas closed last week on fresh 52 week lows and continued to plummet to 2 year lows this week. The MACD has turned down on the weekly while below zero, which is never a nice place for a rollover. It suggests more weakness to come. If investors were trying to balance their energy sector allocation risks by moving to companies with an equal mix of Natural Read More 

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Regional Bank SPDR Goes for a Breakout

by Arthur Hill

The Regional Bank SPDR (KRE) is showing potential with a break above the flag trend line. Notice how the ETF surged and then corrected with the falling flag. This correction alleviated overbought conditions from mid November and the breakout signals a continuation of the prior surge. The indicator window shows momentum improving as MACD turns up the last few days.  Read More 

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Three Leading Industry Group ETFs for December

by Arthur Hill

December has been one mixed up month. The Nasdaq 100 ETF (QQQ) is down around 1.1%, the Russell 2000 iShares (IWM) is up around 2% and the S&P 500 SPDR (SPY) is up .30%. We can also see mixed results when looking at the Performance for 10 key industry group ETFs. The Retail SPDR (XRT) is flat, the Biotech SPDR (XBI) is up over 6% and the Metals & Mining SPDR (XME) is down over 7%. There is one interesting take away here though. Notice that the Regional Bank SPDR (KRE), REIT iShares (IYR) and Semiconductor SPDR (XSD) are up. Outside of biotech, these three are showing some upside Read More 

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Google (GOOGL) Stops At The Last Gap Saloon

by Greg Schnell

Google (GOOGL) is one of the great pioneering companies of our time. We use it every day and if someone tries to avoid using Google, it is almost impossible. So to see one of the dominant stocks in our world join the list of companies making fresh 52 week lows seems almost shocking.  But Tuesday marked the first time Google made a 52 week low since the financial crisis. Yes, the last 52 week low was 6 years ago. With Wednesday's Patience Day, Google rallied but it rallied less than the $SPX, the Nasdaq Composite ($COMPQ), or the Nasdaq 100 ($NDX). It is a primary component Read More 

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Caribbean Fund Surges to Multi-year High

by Arthur Hill

Cuba is in the news today on the announcement that the US and Cuba will start talks to normalize ties. What does Cuba have to do with a Technical Analysis website? Well.I was looking at the most actives on the Nasdaq and saw CUBA with a 40+ percent gain on big volume. This is the Herzfeld Caribbean Basin Fund and it would appear to have ties to Cuba, though I cannot confirm. In any case, the fund broke above the highs extending back to early 2013 and could be poised to start a new era. While I would not run out and mortgage the house on this one right now, it is one to keep on the Read More 

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IWM and QQQ Break Support - GLD Breaks Channel Line

by Arthur Hill

QQQ broke pennant support on Friday and continued below 102 on Monday to break its support zone. The early December trend line and last week's highs mark resistance at 105. Apple continues to work its way lower and I am marking resistance at 112.  ************************************************************** IWM is still holding up better than SPY, but the ETF broke support with a move below 114 on Monday. A short Raff Regression Channel marks the current downswing with resistance set at 116 Read More 

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Several Consumer Discretionary Stocks are Bucking the Market

by Arthur Hill

The S&P 500 was hit pretty hard over the last six days with all nine sectors losing ground. There were, however, some pockets of strength in the consumer discretionary. The Sector Market Carpet shows performance for the consumer discretionary sector since last Monday, 8-December. Over a dozen green boxes can be found, and these are stocks that advanced in the face of broad market weakness. In particular, Macy's (M), Kohls (KSS) and Coach (COH) are up over 3%. Nordstrom (JWN), Best Buy (BBY) and L Brands (LB) are up over 1%.  Read More 

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Teekay Tankers (TNK) Floats Higher In A Sea Of Red

by Greg Schnell

Teekay Tankers (TNK) is a shipper of Crude Oil. With crude oil plummeting, why would shippers be busy? Well, holding spot price crude on a ship till the price improves can be a hedge fund's game. It looks to me that this might be what's going on. Photo Credit:Teekay Tankers Well, the chart on Teekay couldn't look any more than a tanker. Most of it is submerged below resistance, but now it has a mast rising above the surface. On Friday's global plunge, Teekay was up like a rocket with the rest of the crude shippers. In a sea of red the crude shippers were floating upstream. Notice Read More 

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LinkedIn Tests Breakout and Gap Zone

by Arthur Hill

LinkedIn broke out and surged to a new high in early November, and then corrected the last five weeks with a falling channel. This channel retraced 62% of the prior surge and almost filled the gap, but didn't. Throw in support from broken resistance in the 205 area, and the stock is setting up for a potential move higher. A channel break would trigger a price signal and a bullish momentum signal would trigger if the MACD Histogram turns positive.  Read More 

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Small Caps are Starting to Outperform

by Arthur Hill

Small-caps are starting to live up to their reputation for outperformance in December. Even though the month is far from finished, the PerfChart below shows the Russell 2000 and the S&P Small-Cap 600 with 1+ percent gains so far. In contrast, the other seven indices are actually down month-to-date. Talk about a seesaw market.  Read More 

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Tesla (TSLA) Breaks Support

by Greg Schnell

Tesla (TSLA) seems to be the talk of the town. The leader, Elon Musk, always has an interesting perspective on what is going to be big for the company. Since they launched their Gigafactory initiative, Tesla has been in a topping pattern. We can see the sudden jump the stock took on the announcement of a gigafactory. Tesla pulled back and went on to make a higher high, but it was almost all gained and lost within a week. Since being at $291, Tesla has pulled back and closed at $216. Tesla is currently testing support after breaking below the previous low at $217 and has now bounced Read More 

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Bank of America (BAC) Tests Resistance

by Greg Schnell

Bank of America (BAC) has been pausing at resistance for a while. But Friday it showed big interest with a nice volume surge. We can see it is sitting just below the spring time highs. With the MACD finding support just above zero, a near doubling on the daily volume, all with the surge above resistance, this looks very sweet. It was the #1 most active stock on Friday! Good trading, Greg Schnell, CMT Read More 

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Russell MicroCap iShares Goes for P&F Breakout

by Arthur Hill

The Russell MicroCap iShares (IWC) is leading the market higher on Friday and breaking above a triangle trend line. The P&F chart shows the ETF surging in October and then consolidating in November. The red A marks the beginning of October and the red B marks the beginning of November. With a big move today, the current X-Column broke above the prior X-Column to trigger a double top breakout and exceeded the triangle trend line, which I drew by hand using MS Paint.  Read More 

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Seasonality Tool Says 'Tis the Season

by Arthur Hill

There has been a lot of chatter about the seasonal pattern for the S&P 500 in December, and it is bullish. StockCharts users do not need to rely on the chatter because they can chart seasonal patterns using our Seasonality Tool and see for themselves. The chart below shows the seasonal tendencies for the S&P 500 over the last twenty years. The S&P 500 has closed higher 75% of the time in March and December, and the average gain for December is 1.6%. Seasonal tendencies do not always pan out, but the S&P 500 is in a clear uptrend and the bullish seasonal pattern acts as Read More 

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Taser (TASR) Goes Ballistic

by Greg Schnell

Taser (TASR) is developing cameras for the police forces around the world. Here is the chart. The Relative Strength shown in purple is up trending and the SCTR is one of the best.The stock has consolidated for a year and is now breaking out on high volume. What is nice about TASR is the unique niche it resides in is very profitable and they already have inroads with most police departments. Looks interesting here. Highly volatile. Good trading, Greg Schnell, CMT   Read More 

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Broker-Dealer iShares Forms Classic Continuation Pattern

by Arthur Hill

The Broker-Dealer iShares (IAI) surged to the September high and then stalled with a three week consolidation. With a downward slope, this consolidation looks like a falling flag, which is a bullish continuation pattern. A breakout at 41 would signal a continuation higher and project a move to new highs. Chartists can also watch StochRSI for a pop above .80 to trigger an upside thrust in momentum.  Read More 

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Solar ETF Triggers Bearish Continuation Signal

by Arthur Hill

Lower energy prices may be making solar less competitive and putting pressure on solar-related stocks. The chart shows the Solar Energy ETF (TAN) breaking down in Sep-Oct, consolidating with a triangle and breaking triangle support with a sharp two-day decline. This break signals a continuation of the prior decline and targets a move to new lows. The indicator window shows MACD in negative territory and moving back below its signal line.  Read More