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California Amplifier (CAMP) Retests Key Support Zone

by Tom Bowley

A little more than a week ago, CAMP broke trendline resistance after posting better than expected earnings results.  CAMP's top line was $69.2 mil (actual) vs. $68.0 (estimate), while its bottom line also beat Wall Street estimates, $.29 vs. $.25.  The breakout occurred on huge volume and after rising to nearly 22.00, RSI moved into VERY overbought territory above 80 as CAMP needed a breather technically to unwind. Over the past few days that's exactly what we've seen with CAMP's reward to risk from a long entry perspective greatly improving.  The top of gap support resides Read More 

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Three Key Groups Lagging in April

by Arthur Hill

The S&P 500 remains in an uptrend and hit a new high on Monday, but some key groups are showing signs of selling pressure in April. The PerfChart below shows month-to-date performance for the S&P 500 SPDR (SPY), the Equal-Weight S&P 500 ETF (RSP), the Equal-Weight Consumer Discretionary ETF (RCD), the Retail SPDR (XRT) and the Home Construction iShares (ITB). SPY and RSP represent the broader market and both are up in April. Even though the broader market is in good shape, the consumer discretionary sector is down 2.46% and under selling pressure. Weakness in this key sector Read More 

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High Yield Corporate Bonds (HYG) Break Out

by Greg Schnell

The High Yield Corporate Bonds ETF (HYG) has broken out above a 8 month consolidation. When the price is rising on a "High Yield" corporate bond fund, it is considered to be that investors are willing to accept more risk. While this is not a portfolio tool for safety, it can be a good indicator of investor appetite towards risk. This is different than an investment grade corporate bond fund like LQD. While this is climbing it is bullish. If it breaks the 5 month uptrend line this would change the technical picture to a more bearish stance. It Read More 

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Johnson Controls (JCI) Breaks Above a 1 Year Consolidation

by Greg Schnell

Johnson Controls reported earnings this morning but the chart was already breaking out to new highs last week. As part of the Cyclicals sector this is a very promising break out. This one year consolidation makes it very interesting. With 2 high volume up days last week that were larger than any up days in the last year, some funds are getting interested as well. The SCTR has just broken above 75 and looks nice and strong here. Good trading, Greg Schnell, CMT Read More 

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Home Construction iShares (ITB) Hit Critical Support

by Tom Bowley

At 10am EST this morning, March new home sales were released and they fell well short of expectations.  Is that a long-term problem for home construction ($DJUSHB) or is it an opportunity for traders to move into this area of the market at lower prices?  Well, you'll have to be the judge.  But technically, this has been, and continues to be in my opinion, one of the strongest areas of the stock market.  The DJUSHB broke out of a bullish ascending triangle in February 2015 at the 550 level and has since been back to test price support there.  Well, don't look Read More 

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Techs Lead and Staples Lag on Market Carpet

by Arthur Hill

The image below shows the Sector MarketCarpet at "sector" level, which means we are seeing solid boxes for each of the nine sectors. There is a table on the left that ranks sector performance and this MarketCarpet shows performance for the current week (so far). The technology sector is the strongest, followed by industrials, healthcare and consumer discretionary (cyclicals). The consumer staples sector is the laggard and is barely positive for the week. We will look at the technology sector in detail after the jump.  Chartists can drill Read More 

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Activision Flies the Flag at Half-Mast

by Arthur Hill

Activision Blizzard (ATVI) sports a bullish continuation pattern and improving momentum. The stock gapped up in mid January and broke out in early February. ATVI was overbought after a 25% surge and worked off these overbought conditions with an extended flag. I say extended because eight weeks is getting long for a flag pattern. Nevertheless, the flag represents a consolidation and a flag breakout would signal a continuation of the January-February surge. The indicator window shows MACD holding above zero and moving above its signal line this week.  Read More 

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Apple Gets a Volatility Squeeze

by Arthur Hill

Trading in Apple has turned dull over the last six weeks as the stock moves in a tightening consolidation. The volatility contraction can be seen by the Bollinger Bands, which contracted to their narrowest since October. Notice that BandWidth moved below 5%. Also notice that the October squeeze featured a head fake to the downside and then a sustained breakout to the upside. John Bollinger notes the following: "Typically what you'll see is a Squeeze, followed by a band tag, followed in turn by the real move".  Apple is currently in the midst of the Squeeze and Read More 

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Salesforce.com Winds up for the Pitch

by Arthur Hill

After surging to new highs in February, Salesforce.com moved into a consolidation as volatility contracted. Notice that the Bollinger Bands narrowed over the last few weeks the BandWidth moved to its lowest level since mid October. Even though a volatility contraction does not give us directional clues, the stock did hit a new high in February and the big trend is clearly up. If the bigger trend is the dominant force, then the stock has a bullish bias and the odds favor an upside breakout. A move above 70 would trigger a breakout and signal a continuation of the bigger uptrend.  Read More 

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Netflix (NFLX) Impresses With Blowout Earnings

by Tom Bowley

After the close on Wednesday, Netflix (NFLX) topped revenue and earnings expectations and promptly rose to all-time highs.  NFLX had been consolidating in bullish sideways fashion for over one year following its prior uptrend.  Volume today is extremely heavy suggesting accumulation and, in my opinion, likely higher prices ahead.  The close today will be important to determine appropriate entry points.  A solid finish would indicate today's open to be a solid gap support level, or 532.00.  Failing to hold that level on the close, however, would potentially set up Read More 

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Small Caps Print Bearish Shooting Star Doji

by Tom Bowley

On Monday, the Russell 2000 ($RUT) was breaking out to an all-time high intraday.  Unfortunately, it wasn't confirmed on the close as this benchmark of small cap stocks reversed late in the day.  It not only left a bearish tail to the upside and closed at its open and near its low of the day (aka shooting star doji), but this failure was notable because it was at all-time closing high resistance.  It doesn't help that it occurred on April 13th, just before income tax liabilities are due.  The balance of today will be interesting for sure, but based on Read More 

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Techs and Large-Caps Take the Lead in April

by Arthur Hill

The performance pecking order changed in April as large-caps and techs moved from under performers to out performers. Even though small-caps and mid-caps are underperforming so far in April, they are still outperforming on a longer timeframe (since early February). The PerfChart below shows month-to-date performance for nine major index ETFs. The Nasdaq 100 Equal-Weight ETF (QQEW) and Nasdaq 100 ETF (QQQ) are the top performers with gains just above 2%. The S&P 100 ETF (OEF) is third with a gain of 1.93%. The S&P SmallCap iShares (IJR) and S&P MidCap SPDR (MDY) are the laggards Read More 

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Baidu Plays Catch Up with an Island Reversal

by Arthur Hill

Julius de Kempenaer noted the surge in Chinese stocks in his most recent RRG post and Tom Bowley noted the breakout in SouFun in a blog post on Wednesday. I will add a third China-related post to the mix by pointing out Baidu. Chinese stocks have been on a tear the last few months with the China iShares (FXI) surging over 30% since October, but Baidu (BIDU) is a noticeable laggard because it is back near its October lows. Tencent (TCEHY), a competitor, was lagging from October to December, but caught a bid the last few months and surged to new highs. As the chart below shows Read More 

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SouFun Holdings (SFUN) Soaring With China Rally

by Tom Bowley

SFUN serves as a real estate internet portal in the Peoples Republic of China and is rallying strongly today on the heels of overall strength in most Chinese shares.  Technically, the downtrend in SFUN has been reversed on a series of positive technical developments.  First, SFUN had been in a very tight down channel since struggling at price resistance just above 12.00.  There was a gap higher on very strong volume in late March that started SFUN's resurgence.  Note that on the subsequent pullback that both gap support and the now-rising 20 day EMA held, a bullish Read More 

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Lazard Leaves MS and GS in the Dust

by Arthur Hill

Lazard (LAZ) has left Goldman Sachs (GS) and Morgan Stanley (MS) in the dust by outperforming these two behemoths since early February. The SharpChart below shows year-to-date performance for these three stocks and the Finance SPDR (XLF). GS is near break even for the year, MS is down over 6% and XLF is down around 1.5%. Lazard, on the other hand, is up just over 10% and showing relative strength.  Read More 

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Weakening Dollar Providing Short-Term Opportunity In Oil

by Tom Bowley

FMC Technologies (FTI) provides technology solutions for the energy sector.  Much of the energy space has struggled for the last several months for a number of reasons, one of which has been the higher dollar.  The rising greenback has provided a headwind for energy companies, but with the suddenly weak jobs report on Friday, the U.S. dollar has continued to correct.  FTI seems to be in a solid technical position for a bounce as it's challenging multi-year price support after a rapid decline at a time when a long-term positive divergence has formed on its weekly chart Read More 

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The Sun Starts Shining on Suncor

by Greg Schnell

Suncor is Canada's largest energy company. It is an integrated oil company meaning it has both (Upstream) Exploration & Production as well as (Downstream) gasoline refining and marketing. Suncor markets the fuel through the Petro-Canada brand in Canada. It has a US dollar market cap of $45 Billion. During Thursday's webinar in the Q&A section, I was asked to comment on Suncor. While it is a tremendous company, it has gone mostly sideways for years after the 2009 merger of PetroCanada. Warren Buffett was doing some buying around this level in 2013. I have shown the chart Read More 

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10-yr Yields, the Hockey Stick and the Dollar

by Arthur Hill

The Dollar Index has been on a tear the last four months as the spread between the 10-YR Treasury Yield ($UST10Y) and German 10-YR Bund Yield ($DET10Y) widened to historic levels. The chart below shows 10-yr yields for four countries in the top window. US and UK yields are by far the highest. The German 10-yr Yield moved below the Japanese 10-yr Yield in February-March and the German yield is the lowest.  The middle window shows the ratio of the US 10-yr Yield and the German 10-yr Yield. This ratio is above 10 and this means 10-yr US Treasuries yield Read More 

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XLY Breadth Indicator Forms Bearish Divergence

by Arthur Hill

The Consumer Discretionary SPDR (XLY) is perhaps the single most important sector in the stock market because it is the most economically sensitive sector. Industry groups in this sector include retail, restaurants, autos, media and home construction. XLY is weighted by market cap and reflects the performance of the large-caps in the sector. The Equal-Weight Consumer Discretionary ETF (RCD), in contrast, is equally weighted and more representative of the sector as a whole.  Chartists can also use the XLY AD Line ($XLYADP) to analyze breadth for the sector. Also known as internals Read More