Don't Ignore This Chart

Colfax (CFX) Bottoming in Reverse Head & Shoulders Fashion?

by Tom Bowley

Industrial machinery ($DJUSFE) stocks have been consolidating in what some technicians might argue is a bullish inverse head & shoulders pattern.  If the group does eventually see money rotate back into it, Colfax Corp (CFX) could be a direct beneficiary.  CFX lost 40% of its market capitalization in the second half of 2014 into early 2015, but it's beginning to show signs of life.  The downtrend in 2015 is coming under attack as recent price moves to the upside have been supported by very solid volume.  In addition, CFX has broken its recent relative downtrend Read More 

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Do Cyber Security Hackers Pull Back? HACK Suffers A Pull Back

by Greg Schnell

Cyber security is one of the fastest growing segments within the IT community. Recently, an ETF launched to help investors invest in a broad array of cyber security technologies. The cyber security ETF ticker symbol is HACK. Even though February was a short month, this ETF moved up 20% within the month. After the initial surge in February, HACK pulled back to support around $27.50. With a bounce in mid-March and a new retracement to a lower level this might need more time to find support. We now have a down trend defined by lower lows and lower highs. However Read More 

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Lexmark (LXK) Challenges Wedge Resistance On Increasing Volume

by Tom Bowley

Lexmark (LXK) announced after the closing bell on Tuesday that it was acquiring enterprise software company Kofax (KFX) for $1 billion, its largest acquisition in its history.  Traders were initially excited by the announcement, driving LXK's stock price higher by more than 11% and LXK cleared bullish wedge resistance intraday and intraweek.  Subsequent selling, however, is now reflecting hesitation at that key technical area.  Volume is massive today so the close this week will be important.  The February high just above 45.00 is another critical price level Read More 

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Interface (TILE) Floors It, Approaches Major Resistance

by Tom Bowley

TILE is an industrial goods company that designs, produces and sells modular carpet products internationally.  Strong quarterly results reported in February, exceeding Wall Street estimates, has sent TILE's shares surging 27% higher in just the past month.  Major overhead price resistance is approaching, however, so it will be interesting to see if the momentum will continue and result in a breakout.  The daily chart (not shown below) shows seriously overbought momentum oscillators so TILE may need a rest or period of consolidation before clearing key resistance Read More 

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A Tweet-Worthy Island Reversal and Squeeze

by Arthur Hill

Even though the pattern is a bit big, the gaps fit and it looks like Twitter (TWTR) traced out a large island reversal from late October to early February. The stock gapped below 45, traded below this gap for a few months and then gapped above 45. The result is a price island where shorts are trapped with losses. Anyone shorting the stock below 45 is now trapped with a loss. The blue gap zone turned into support last week as the stock bounced off the 45 area. We have yet, however, to see a continuation of the February surge. Right now the Bollinger Bands are narrowing as volatility Read More 

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Facebook (FB) Breaks Out Above A Nine Month Consolidation

by Greg Schnell

Facebook (FB) has been holding growth investors at bay for nine months. In a world where patience is added or removed, it's been part of the Facebook story for 3 seasons. As we roll into spring this weekend, Facebook is popping up like crocuses in the Netherlands.  These bases are very welcome on a high growth stock and are traditionally good entry points. Don't forget to plan the trade. With spring on our door, the Keukenhof gardens open in Holland tomorrow! Perhaps the flowers will bring a smile as big as the one on investors' faces with the new Read More 

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Crane (CR) Confirms "W" Bottom, Testing Support

by Tom Bowley

Crane (CR) is a part of the Industrial Machinery ($DJUSFE) space, which has been consolidating since last summer and is poised to break out once again.  CR printed a "W" bottom in December and January, with this bottom confirmed with the high volume gap up and breakout in early February.  This also triggered a relative breakout of CR vs. its industrial machinery peers.  CR became quite overbought in February with its RSI touching 80 and its stochastic reading in the 90s.  Since then, however, we've seen lots of selling pressure and downward price action with the RSI now Read More 

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The Two Strongest Sectors in March Are....

by Arthur Hill

There are several ways to measure relative performance here at StockCharts. Chartists can use ratio charts (XLF:SPY), the StockCharts Technical Rank (SCTR) or Relative Rotation Graphs (RRGs). Chartists can also compare the respective price charts. The chart below shows closing prices for the HealthCare SPDR (XLV), Finance SPDR (XLF) and S&P 500 SPDR (SPY). The red dotted line marks the closing high on March 2nd. Notice that SPY remains well below this high, but XLV and XLF closed above this high on Monday and Tuesday. These are the only two sector SPDRs trading above their March 2nd Read More 

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Gold Investors Expect A Pot O' Gold Real Soon

by Greg Schnell

While we don't usually use triple ETF's for the 'Don't Ignore This Chart' blog, the clues on this NUGT chart are applicable to all gold traders.  There are a certain group of traders that trade the 3x ETF's. While I don't trade the triples, this active trader crowd can offer clues to potential trend changes. This week is a good example. I want to zoom in on the volume graph. As the miners drilled lower in late October, the volume exploded on the chart, indicating traders were starting to expect some upside. Their timing was pretty good with a 60% gain in 3 weeks. The volume Read More 

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Yahoo (YHOO) Could Use A Little Yahooing

by Greg Schnell

In Calgary, we use the word Yahoo way more often than the rest of the world. Our primary usage is during Stampede Week or The Greatest Outdoor Show On Earth. The bars are advertising "the most fun you can have with your boots on", the streets are filled with hay bales and stampede breakfasts, the chuckwagons are running, the farmers are baling hay, and it's almost impossible to be grumpy. The smiles, laughter, and the constant chant of "Yahoo-o-o-o" permeates the foundation of work hard, play hard. There is the odd bit of frac-fluid involved. But we are not here to talk about Read More 

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McClellan Oscillators Remain Negative

by Arthur Hill

The NYSE McClellan Oscillator ($NYMO) turned negative on March 4th and moved below -25 on March 6th, while the Nasdaq McClellan Oscillator ($NAMO) also turned negative on March 4th, but did not move below -25 until March 10th (red arrows). As these charts show, chartists can use crosses of the zero line for signals or set a bullish-bearish threshold to reduce whipsaws. There were dozens of crosses above/below the zero lines over the last six months. By using +25 and -25 to qualify signals, chartists can reduce whipsaws significantly. Whipsaw reduction, however, does come at the expense of Read More 

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An Island Reversal for S&P MidCap SPDR

by Arthur Hill

The S&P MidCap SPDR (MDY) fell to broken resistance with a gap down on Tuesday, firmed on Wednesday and gapped up on Thursday morning. The two gaps created a price "island" on Tuesday-Wednesday and an island reversal over the last four days. Notice that this island reversal also marks a bounce off first support (from broken resistance). As a short-term pattern or reversal, Thursday's gap must hold to keep it valid. A move below 270 would fill the gap and negate this reversal pattern. Also notice that MDY hit a new high just three weeks ago and shows relative strength as the price Read More 

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Healthcare Stocks and International ETFs Lead SCTR Gainers

by Arthur Hill

Chartists looking for movers and shakers can turn to the home page and check out the SCTR tables. Click the Top Up tab to see the big gainers (relative strength) and the Top Down tab to see the big losers (relative weakness). The screen shot below shows three stocks from the healthcare sector making big gains (TEVA, MYL and WAT). Also notice that four international ETFs are in the top ten for ETFs (EWG, EIS, EWT, CHIX). Notice the CandleGlance links at the bottom. Click these to see all ten charts.  Read More 

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Cisco Systems (CSCO) Tests 14 Year High

by Tom Bowley

Since the tech bubble popped in the early 2000s, CSCO has slowly risen from the ashes.  It fell a remarkable 90% from its high in 2000 to its low in late 2002.  Keep in mind, however, that it made a parabolic move higher prior to this drop.  2000 started a bear market that most technology bulls would like to forget.  Over the past 14 years, technology bulls have done just that.  CSCO posted a reaction high slightly above 30.00 in October 2007, just before the latest infamous bear market.  CSCO lost more than 50% of its value during that last Read More 

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KLA-Tencor (KLAC) Testing Key Support Zone

by Tom Bowley

Semiconductors ($DJUSSC) are one of the worst areas of the market today and have been one of the worst areas of technology over the past week.  KLA-Tencor (KLAC) has hit a key area of support, however, and certainly presents a much better reward to risk opportunity.  60.53 represents gap support and the February intraday low was 59.74.  These are two critical levels to watch as support in the near-term.  Should the DJUSSC begin to lead again on a relative basis, KLAC would most likely follow suit. Happy trading! Tom Bowley Read More 

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Interest Rate Sensitive ETF's Fill The Top Up Category

by Greg Schnell

Yesterday on the webinar, I suggested we were at the make or break point for the change in interest rates. Today, the SCTR rankings for ETF's related to interest rates rising were all up big in a big down market. The one hidden gem in the group is the SPDR KBW Bank Index ETF (KBE). On the Relative Rotation Graph it is in the red zone but started to turn up this week. With the support of other interest rate sensitive ETF's shown in this RRG, this could be a very important turning point on interest rates. For a linkable version of this chart, please click here Read More 

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Cardtronics (CATM) Fills Earnings Gap

by Tom Bowley

Cardtronics (CATM) reported stellar quarterly results on February 4th after the close, beating Wall Street estimates with respect to both revenues ($283.9 million actual vs. $270.6 million estimate) and EPS ($.64 actual vs. $.57 estimate).  At the open on February 5th, CATM gapped higher to 40.00 from its prior day 35.77 close.  It took nearly a month, but CATM just filled its gap earlier this week, touching 35.75 on Tuesday.  Failure to hold that gap support could result in a further decline to price support at 33.44.  Otherwise, a reversal here and push back Read More 

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Schwab Goes for a Break as Volume Indicator Leads

by Arthur Hill

Charles Schwab (SCHW) surged in February and then consolidated the last few weeks with an ascending triangle, which is a bullish continuation pattern. A breakout would signal a continuation of the prior advance and target a move to new highs. The indicator window shows the Accumulation Distribution Line (ACDL) hitting a new high already, and this indicates that stock has been under accumulation during this ascending triangle.  Read More 

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Solar Stocks Are Shining On The RRG

by Greg Schnell

The RRG charts were introduced to StockCharts.com last year. They create such an interesting view of the markets. In December, we talked about the solar stocks being pulled back on the back of lower crude prices. The 9 part series on Solar stocks used the RRG as one tool to demonstrate the trend change in an industry group. That group of articles can be found by following this link. The Solar Stock Series. The RRG chart starts to show the industry group direction relative to a benchmark like the S&P 500 ($SPX). The solar stocks have rotated from one of the weakest industry Read More 

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BABA: Breaking Down or Reversing With Positive Divergence?

by Tom Bowley

On Monday, BABA closed at 84.00, its lowest close since its IPO in September.  However, that close was very close to support and BABA is currently oversold with its RSI below 30 and its stochastic reading at 11.  Note there's a long-term positive divergence that's formed on this low, suggesting that downward momentum is slowing.  For me, the combination of price and volume trumps all other indicators though.  Today's volume is already approaching its 90 day moving average - in just the first 75 minutes of trading.  It's important to watch the action here Read More 

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Relative strength in Gasoline and Brent Lifts Two Refiners

by Arthur Hill

WTI Crude ($WTIC) remains relatively subdued, but Brent ($BRENT) and Gasoline ($GASO) have been moving higher the last several weeks. The top chart shows gasoline relative to crude using a ratio plot ($GASO:$WTIC), and the second chart shows the BRENT-WTI spread ($BRENT-$WTIC). Both rose sharply from mid February to early March. This means gasoline prices are rising relative to oil prices and the difference between Brent and WTI Crude is widening. These developments are bullish for refiners and many refining stocks are up sharply this year. The chart also shows Holly Read More