Don't Ignore This Chart

Pfizer (PFE) Jumps To A New 52 Week High

by Greg Schnell

Pfizer (PFE) is breaking out to new 52 week highs after consolidating for 6 months. The SCTR jumped back above 80% this week which is a sign of strength. While the broad markets like the NYSE Composite ($NYA) have been trying to make new highs since May, some of the defensive stocks like Pfizer are breaking out to new highs. The consolidation range between $33 and $35 now looks to be support on any pullback. The Relative strength in purple broke out and shows clear outperformance to the $SPX. With a strong volume signature and a higher high on the MACD Read More 

Don't Ignore This Chart

Whole Foods Market (WFM) Poor Results Test Support

by Tom Bowley

WFM posted underwhelming quarterly earnings results and the stock is down significantly in early action today.  More importantly, however, is the longer-term price support that's being tested.  WFM has not had an open or a close beneath 35.90 since early 2012 although WFM has tested this area several times over the past 15 months.  Technically, the first thing WFM needs to do is hold onto price support.  From there, the stock needs to break its relative downtrend line where it's been underperforming its peers for nearly two years.  WFM announced that it will be Read More 

Don't Ignore This Chart

Merck Forms Key Outside Reversal on High Volume

by Arthur Hill

The HealthCare SPDR (XLV) has been one of the strongest sectors in 2015, but Merck (MRK) has lagged both the market and the sector. The first chart shows the HealthCare SPDR (XLV) relative to the S&P 500 SPDR (SPY) using the price relative (XLV:SPY ratio). This ratio has been rising since late December and this means XLV is outperforming SPY (the market). The middle window shows Merck relative to SPY (MRK:SPY ratio) and the lower window shows Merck relative to XLV (MRK:XLV ratio). Both ratios are falling and this means Merck is underperforming the market and its sector. Despite Read More 

Don't Ignore This Chart

Have You Driven Ford's Stock Price Lately?

by Greg Schnell

Ford (F) announced earnings and they were well above the street estimates. I wondered if that would send the stock price rocketing up on a big bullish day today. Here is the chart after earnings. A few positives showed up today. Ford moved up more than the indexes did. It moved above a downward trend line that has been violated and failed before. It is still below the 200 DMA and the SCTR ranking is a paltry 50% which means it's average at best right now. The MACD has a slight bit of positive divergence, but this doesn't look like a must own chart yet. The increasing volume over the last Read More 

Don't Ignore This Chart

Chinese Holdings Weigh on Global X Social Media ETF

by Arthur Hill

The Social Media Global ETF (SOCL) fell sharply on Monday to signal a continuation of the prior decline. The chart below shows SOCL breaking support with a sharp decline in late June and early July. This is the break that broke the bull's back. Notice how the ETF formed a lower high in early June and broke below the May low in early July. The subsequent bounce in mid July retraced 62% of the prior decline and carried the ETF back to the 50-day SMA. This is normal for a retracement and the 50-day acted as resistance. With a sharp decline the last few days, a lower high formed and the bigger Read More 

Don't Ignore This Chart

Biogen Inc (BIIB) Suffers Massive Breakdown

by Tom Bowley

There are pullbacks in uptrends and then flat out trend reversing breakdowns.  We never know for sure which is which until history plays out.  But Biogen's (BIIB) massive selling on Friday has all the makings of the latter.  Any time a company rises more than ten fold in less than five years, it's generally due to very strong core growth.  The one thing investors do NOT want to see is the cutting of growth forecasts.  That's what BIIB did on Friday when they released their latest quarterly results, cutting their revenue forecast from 14-16% growth to just Read More 

Don't Ignore This Chart

Are Municipal Bonds Getting A Boost Here?

by Greg Schnell

The BlackRock MuniYield Fund (MYI) broke above the trend line this week. This move into Munis and the TLT's move to higher ground all point to a change in trend on the bond side of the landscape. The Relative Strength shown in purple has not broken out yet and the MACD has not crossed up on this weekly chart but is very close to doing so. A rise in bond prices shown on this chart would create a decline in yields which suggests the Fed's goal of raising interest rates is slipping, based on the price action in the market. The MACD turning Read More 

Don't Ignore This Chart

Should FBHS Be A Fixture In Your Portfolio?

by Tom Bowley

Fortune Brands Home & Security, Inc (FBHS)  surged in volume today and appeared to be on its way to a breakout above closing price resistance near 48.00.  FBHS actually printed an intraday high of 47.99 before reversing and finishing weak the final two hours.  From the weekly chart below, it's clear to see that FBHS has printed a cup with handle, a bullish continuation pattern off its prior uptrend.  We remain in the handle for now, but a high volume breakout would measure close to 60.00 in time so it's certainly worth keeping an eye on this one.  FBHS has Read More 

Don't Ignore This Chart

Airline Index Perks Up with a Reversal Pattern

by Arthur Hill

The Airline Index ($XAL) has been a real dog in 2015, but the index is showing signs of support and a double bottom could be emerging. The chart below shows $XAL peaking in January and moving lower the last six months. The 10-day EMA is below the 100-day EMA and the trend is clearly down. Signs of support are emerging because the index bounced off the June low in early July.  Note that Tom Bowley featured the DJ US Airline Index ($DJUSAR) in his Trading Places blog as the index tested support in early July. It was a timely post that may prove even more Read More 

Don't Ignore This Chart

Why IBM Has No Credibility As A Safe Investment

by Greg Schnell

IBM (IBM) has been a difficult stock for years. Investors keep holding 'Big Blue' expecting a turn around. This difficulty is the stock has no credibility as a safe investment. The last time IBM was a top quartile stock according to the SCTR is marked with a red arrow. There has not been one weekly close in almost 4 years that IBM ranked as one of the better stocks to own. Three months ago in April 2015, IBM broke above resistance at 165 and also broke above the 40 WMA on earnings. The resistance level of $165 was taken out but IBM made the highs for Read More 

Don't Ignore This Chart

An Island Reversal for DIA

by Arthur Hill

With a gap and big surge, the Dow Diamonds (DIA) triggered a series of bullish signals that remain valid until proven otherwise. First, let's look at the bullish signals. DIA bounced off support in the 174-175 area in early July and broke resistance with a surge above 178. Also notice that an island reversal formed as DIA gapped below 178.2 on 29-Jun and then gapped above this level on 13-Jul. The resulting gaps created an island where bears (short-sellers) are trapped with losses. Momentum also turned bullish as MACD moved above its signal line and turned positive.  Read More 

Don't Ignore This Chart

After A Series Of Direction-less U-turns, Google (GOOGL) Becomes A Top Performer

by Greg Schnell

Anyone who had doubted Google (GOOGL) and their ability to make money got routed to the Pocket of Pain in today's trading. Google surged 25% in trading and was up $140 from Thursday's close. This massive ramp up is clearly a house cleaning for all those caught shorting Google. But the question now is what to do with Google? Let's look at the chart. The SCTR shows Google climbing from 60 to 99 this month. That is a big move. Notice that the SCTR has never been above 75 for the last 5 quarters. That level of average performance also created indifference towards owning the stock Read More 

Don't Ignore This Chart

Atmel (ATML) Shows Relative Strength, Nears Support

by Tom Bowley

Just a couple months ago in early May, ATML gapped higher on big volume and hasn't looked back since.  Along the way, it cleared price resistance just below 9.00 on very heavy volume and subsequently surged to 10.50 before becoming violently overbought and in need of relief.  Like most semiconductors, ATML has struggled over the past month.  But while many of its peers are struggling to hold onto intermediate-term price support, ATML has simply fallen back to its recent breakout level.  Given its superior relative strength within its group, strong volume trends and an Read More 

Don't Ignore This Chart

Goldman Sachs Stares At Pluto (GS)

by Greg Schnell

Goldman Sachs (GS) continues to look towards Pluto for direction. After dipping 80% in the 2009 financial pullback, Goldman bounced well. On its return to the $180.00 level, Goldman decided to drop 60% again back to $79.95. But the low in 2012 at $86.80 has been the last time buyers got a deep discount on the stock. GS has been a solid performer with a strong upward trajectory.  Remarkably, the SCTR ranking has not shown Goldman in a good light. Over the past 7 years, Goldman has not been one of the top quartile stocks very often. The line on the SCTR is at 75%. Goldman is Read More 

Don't Ignore This Chart

Why Technicians Are Worried And Fundamental Investors Are Not ($SPX)

by Greg Schnell

For fundamental investors, the price action is still in the top right corner so why worry? For technicians the bull market message became more muted last week. Some of the main technical indicators rest on charts without understanding the message they send and Friday's signal makes this blog important. The RSI and the MACD on the $SPX are flashing caution signs, but not sell signals.  Let's drill into the chart. The RSI is explained in this ChartSchool article (RSI). The RSI shown below for the $SPX is a more valuable indicator for me on the weekly charts over long periods Read More 

Don't Ignore This Chart

Technology And Internet Stocks Leading Today's Advance

by Tom Bowley

Many traders are believing the Dow Jones U.S. Internet Index ($DJUSNS) is dead money and for the past 18 months or so, that's been mostly true.  The DJUSNS has been unable to sustain a move above 900, testing that level in March 2014, September 2014, March 2015 and April 2015 without any breakout success.  While that certainly has left many traders frustrated, it would be unwise to give up on the group.  In fact, a very bullish case can be made for internet stocks based on their long-term ascending triangle pattern, the breakout of which would likely send lots of technical Read More 

Don't Ignore This Chart

Restoration Hardware (RH) Poised For A Breakout

by Tom Bowley

Restoration Hardware (RH) engages in the retail of home furnishings.  Over the past three months, the home improvement retail index ($DJUSHI), to which RH belongs, is down more than 4% while RH consolidates ahead of what could be a triple top breakout.  As a result, RH is showing solid relative strength vs. its peers of late and is doing so with nice volume trends in play.  A close above 100 on above average volume would represent a very bullish development with a target close to 125.  The rising 20 week EMA has been providing solid support during pullbacks Read More 

Don't Ignore This Chart

Bullish Percent Of The $SPX Strikes An Important Level

by Greg Schnell

The Bullish Percent charts are one of the technical tools that quickly demonstrate how broad or narrow the rally is. I like to look at them together with the Number of Stocks above the 200 DMA ($SPXA200R). Starting with the $BPSPX which is the blue wavy line, we can see the market ebbs and flows. The lime green line on both charts mark the current level. If this market is going to bounce, this is the level of market weakness we usually get before buyers step in. Looking in 2004, 2005, 2006 this 50% level is pretty important. How the market responds right now is important. With Read More 

Don't Ignore This Chart

CME Group Consolidating in Bullish Ascending Triangle

by Tom Bowley

The recent movement in CME shares back and forth is nothing but noise.  The technical picture here is very solid with an uptrend in place that began in early 2013, preceding the current ascending triangle formation.  During that span, CME more than doubled its stock price although its March high was still approximately 10% below its all-time high set back in late 2007.  While we're likely to see continuing consolidation in the near-term on CME, a high volume breakout of this triangle pattern would measure to the 110-112 range, which would challenge its all-time high Read More 

Don't Ignore This Chart

Short Term Change In Trend In Yen ($XJY)

by Greg Schnell

The Japanese Yen ($XJY) gapped above resistance and the major down trend that has been in place for years. The real question is if this is a interim low in the Yen or a much more important low. The last time the RSI got this strong was back in 2013 and that ended up being a whipsaw or false breakout. Moving to price, the giant slide in value for the Yen created a massive downtrend which only created one higher high occurring in 2013. The price gapped up above the red line resistance today. The blue downtrend which has been going on for a year was also broken on the same move. The level Read More 

Don't Ignore This Chart

The Long Bond ETF (TLT) Tilts Up!

by Greg Schnell

The news in Greece has turned a few charts. The news from China is equally newsworthy. The chart of the TLT is one of the most sensitive as it potentially shows investors looking for safety in US treasuries. We can see the 6 month thrust from January to June was down, but this morning has taken out the prior weekly high. On the daily, the information is a little easier to see. There is a nice positive divergence setting up on the MACD. The Relative Strength has moved above the prior high and so has the SCTR. This morning we made new one month highs which is the first step for a Read More 

Don't Ignore This Chart

Attention Wal-Mart Shoppers!

by Tom Bowley

Wal-Mart Stores (WMT) has been under tremendous selling pressure since it topped at an all-time high near 90 back in early 2015.  The selling began after a long-term negative divergence printed during the second week of the year.  That's a sign of slowing momentum on the buy side and WMT fell into a six month downtrend on the heels of it.  Volume trends have remained on the bearish side, but a hammer printed on Wednesday of last week to suggest a possible reversal was at hand.  That, coupled with the long-term POSITIVE divergence now in play, makes WMT a much more Read More 

Don't Ignore This Chart

$TSX Struggles With Nirvana

by Greg Schnell

The Toronto Stock Exchange was open Friday while the US markets celebrated Independence Day. So it was a potential candidate for the Don't Ignore This Chart blog anyway. However, after using Martin Pring's Nirvana settings, it really is an important time to look at the  $TSX. The price is currently just below the 65 week MA. The three indicators below are still on sell signals. This really needs to turn up right away to hold this long term trend line. We can see the KST for the Relative Strength line is almost above the signal line. If the $TSX could start Read More 

Don't Ignore This Chart

MDSO: Recent Weakness Presenting Opportunity?

by Tom Bowley

Medidata Solutions (MDSO) posted better than expected revenues and EPS in late April and the stock exploded higher as a result.  Since that time, MDSO hasn't been able to add to those gains, instead consolidating in rectangular fashion with its RSI dropping to 40.  As you look at the chart, you can see that each time MDSO's RSI has fallen back to 40 during its current uptrend, it's been a nice time to enter on the long side.  Will this time be different?  This most recent move lower has failed to hold the rising 50 day SMA for the first time since earnings were Read More 

Don't Ignore This Chart

QQQ is Stymied by Performance Split and 3 Consolidations Hold the Key

by Arthur Hill

A look at performance for the top holdings in the Nasdaq 100 ETF (QQQ) explains a lot about performance since March. The PerfChart below shows the percentage change for QQQ and its top nine holdings. Note that this chart does not include Wednesday's price data, which is still subject to change. Over the past four months, QQQ is down around 2%, four stocks are down and five are up. Note that Apple, which is by far the biggest holding, is down and should probably count twice. Using this funny accounting, five are up and five are down, which makes for a draw. I will show two CandleGlance Read More