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Caterpillar (CAT) Makes New 52 Week Highs

by Greg Schnell

It has been a long time since we talked about Caterpillar (CAT) making new highs. The equipment machinery maker has been under duress since the oil market top in 2014. The Caterpillar (CAT) top was within weeks of the oil high and like so many industries that rolled over on the back of the breakdown in oil, Caterpillar tracks roll with the price of oil. I have placed a correlation indicator on the bottom pane of the chart. With the SCTR moving above 75, this looks very bullish. The price will need to take out the $85.08 level next. The volume soared on this week's Read More 

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This Inverse Head & Shoulders Pattern Is Breaking Out On Earnings

by Tom Bowley

Chart Industries (GTLS) was mired in a downtrend for two years, shedding 90% of its market value, but things have changed and the upward momentum is quickly building for this equipment maker for the energy sector.  They blew top and bottom line estimates out of the water and shareholders are finally being rewarded.  Take a look at today's candle: This inverse head & shoulders pattern initially measures to 31.50-32.00 but considering this was once a $130 stock, it's easy to assume that GTLS has much further upside available.  The daily MACD looks very strong right now Read More 

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Counting the Gaps for Clues on Earnings Season

by Arthur Hill

There were dozens of gaps today with most coming to the upside. Down gaps in Akamai (AKAM) and Lumber Liquidators (LL) were countered with up gaps in Apple (AAPL) and Buffalo Wild Wings (BWLD). At midday on Wednesday, the Predefined Scan results showed 22 up gaps on the NYSE-Nasdaq, and 15 down gaps on the NYSE-Nasdaq. The net is +7 for the up gaps. Chartists looking for clues on how the market is reacting to earnings can look no further than this page. More up gaps than down gaps suggests that the market is reacting positively to earnings. I will show a chart of Unisys (UIS) with a Read More 

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T-Mobile (TMUS) Hangs On To New Highs

by Greg Schnell

T-Mobile (TMUS) is never short of attention-getting advertising. In the stock world, nothing garners more attention than new 52 week highs. Last week T-Mobile moved to new highs but never really had a breakout size bar. It pushed above the new highs and then just inched higher each day. Today it pulled back all day but still made a higher high earlier on. If it pulled back to support this could be a nice entry around $43.50.  The Relative Strength line shown in purple is trying to push 10-month highs so this will garner even more attention. Read More 

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Tesla Gets a Relative Strength Surge ahead of Earnings

by Arthur Hill

Tesla (TSLA) caught my eye on Monday because its StockCharts Technical Rank (SCTR) surged over 20 points. The image below shows the SCTR tables for large-cap stocks and ETFs. Notice that I clicked the Top Up tabs to view those with the biggest SCTR gains. Micron (MU) is the top gainer and Tesla is second in early trading on Monday. You can find these tables mid-way down on our homepage.  We will look at the chart after the jump.  On the price chart, TSLA shows a strong advance followed by a falling channel. I view this falling channel as a Read More 

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Here Are The Two Best Performing Industry Groups In August

by Tom Bowley

The summer months can be very difficult for U.S. equities, as history has proven over time.  But there's always a bull market somewhere and the consumer electronics space seems to find a sweet spot in August.  There are only two industry groups that average more than 5% monthly gains during August.  One is the Dow Jones U.S. Consumer Electronics Index (+7.5% over the past 17 years) and the other is the Dow Jones U.S. Gold Mining Index (+6.3% over the past 17 years).  However, seasonality patterns over the subsequent two months clearly favor the DJUSCE as Read More 

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Carmax (KMX) Drives Off The Lot

by Greg Schnell

Carmax (KMX) has a great technical chart today. With the SCTR soaring to 88, the price action shows it is one of the best stocks out there. But there is a little more history on the SCTR that is important. One of the best parts about the SCTR is we can look at how it performs relative to its peers over time. To my knowledge, this is the only plottable indicator that keeps track of the relative ranking compared to its peers. It was over a year ago that KMX fell out of the top performer range above 75. That makes the stock difficult to hold to me. If it is not a top performer, why hold it Read More 

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Encana Breaks Downtrend On Strength Of Earnings

by Tom Bowley

Actually, Encana (ECA) has broken two downtrends - a short-term trend and a long-term trend.  ECA hit its all-time high of roughly 42.50 just before this bull market began.  Shareholders of ECA haven't seen much bullish action since this seven year bull market began, but technically things are improving on both their daily and weekly charts.  Check them out: The daily chart shows that today's reaction to its better than expected earnings is a bullish triangle breakout with very heavy volume.  But the longer-term weekly chart has been acting very bullishly as Read More 

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QQQ Sets Sights on All Time High with Channel Breakout

by Arthur Hill

The surge in stocks entered its fourth week with QQQ extending its channel breakout. The chart below shows the ETF surging earlier this year and then embarking on a correction with a falling channel into June. This correction clearly ended with the breakout near 110 and this zone now becomes the first support level to watch. A strong breakout should hold so a break back below 108 would call for a re-evaluation. With the breakout dominating the chart right now, QQQ is set to challenge its all time high around 115.  The indicator window shows the price Read More 

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Kinder Morgan Stock Starts Flowing (KMI)

by Greg Schnell

Kinder Morgan (KMI) is a large energy transporter with pipelines and storage across North America. This vast network of systems is a key component to the energy infrastructure and flow of key commodities. After struggling with some debt ratio issues last year, the stock was beaten down. Recently, the stock was pinned in a range after bouncing off the lows. Last week, KMI broke out in classic fashion, surging above the 40 WMA and looks to have lots of potential for moving higher. After surging to new 6 month highs, this stock now has an SCTR of 97.5. As it Read More 

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Small-caps Continue to Outperform Large-caps

by Arthur Hill

The S&P Small-Cap 600 has been leading the S&P 500 since mid February as a key ratio chart hit a multi-month high last week. The main window in the chart below shows the $SML:$OEX ratio, which plots the performance of the S&P Small-Cap 600 relative to the S&P LargeCap 100. This ratio rises when small-caps outperform large-caps and falls when small-caps underperform. Note that this ratio bottomed in mid February and zigzagged higher the last five months. Thus, relative strength in small-caps is nothing new for stocks. On the chart, each peak was higher than the prior peak Read More 

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"All Aboard!" The Railways

by Greg Schnell

This week all the railways accelerated higher and the Railway Index broke out to new highs. But the breadth across all the railways is particularly important. I've chosen Kansas City Southern (KSU) to demonstrate the railways are breaking out. Recently KSU surged above and then pulled back. It continued to get support over the last two months at the 200 DMA. This week the stock broke back above the trend line. The SCTR has surged above 75 and the Relative Strength is breaking out from a three-month downtrend. The volume has surged the last two days and the MACD has moved above zero. This Read More 

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Prime Example Of An Untradable Stock

by Tom Bowley

Prior to the opening bell on Tuesday, Fastenal (FAST) confessed to below consensus revenues and EPS, normally a big problem for a stock.  Sure enough, FAST fell approximately 4% on the open Tuesday, providing short sellers a quick profit.  The problem, however, is that FAST is trading within a multi-year trading range off of an uptrend.  The failure of earnings news to generate a breakout or a breakdown could result in this long-term trading range continuing for quite some time.  Furthermore, the current price resides exactly in the middle of price support and price Read More 

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Coach (COH) Hits The Trail Running

by Greg Schnell

Coach (COH) has been a beaten up premium retailer the last few years. Today marks an interesting change in trend for the retailer. The SCTR has been above 75 all year, but today marks a break in the stock above previous resistance to a new 2-year high. The yield is healthy at 3.1% and Coach has set up a nice basing pattern. With the MACD above zero then pulling back, a new positive cross today looks like a bullish breakout. Retail stocks can break out as early as July and run up into the fall and Christmas season. It looks like Coach is taking the opportunity to Read More 

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Quanta Services Breaks out of Consolidation

by Arthur Hill

Quanta Services (PWR) is showing signs of a long-term trend reversal with its third resistance break this year. The weekly chart shows PWR breaking down in October 2014 and trending lower until early 2016. This downtrend showed its first sign of reversing with the February surge and breakout near 19. The second breakout occurred with the move above the November high in April 2016. After exceeding its November high, the stock embarked on a consolidation in the 22-24 area. It now looks like this consolidation is ending because the stock broke above the April-May highs with a surge the last Read More 

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Devry Breaks 18 Month Downtrend

by Tom Bowley

Devry, Inc. (DV) topped at close to 50.00 during the fourth quarter of 2014 and it has spent the last 18 months declining steadily until reaching what now appears to be a bottom just above 15.00.  A positive divergence has emerged on its weekly MACD and volume trends also appear to have turned a corner and are now more bullish.  Check out the chart: DV has had consecutive weekly closes above its 20 week EMA for the first time since the downtrend began.  Volume trends are improving and a SCTR break above 50 would likely signal the worst is behind this educational Read More 

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Are You Crazy To Buy Growth ETFs Here?

by Greg Schnell

I spent some time on the Commodities Countdown webinar discussing the second half of the year. Currently, there are four growth-related ETF charts that are set up to break out. Should that happen, that would be a significant trend change. One example is the Social ETF (SOCL). Today it tied the previous high. A breakout on this ETF would be a significant trend change. The SCTR is at 91. The relative strength is at new 2 year highs and the MACD is accelerating. The volume is still low which is a concern. If you would like more information on some second Read More 

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UPS Delivers Better Relative Performance

by Tom Bowley

Over the past year, United Parcel Service (UPS) has gained 13.77% while FedEx Corporation (FDX) has lost 9.80%.  Relative strength between these two air delivery and freight services companies has gone back and forth over the last decade, but currently UPS has the upper hand and is the company to own.until the relative chart tells us otherwise.  Here's the current relative picture: The green shaded areas represent relative strength in UPS shares while the red shaded areas represent relative strength in FDX.  Over the past decade, UPS has enjoyed longer periods Read More 

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Verisk Analytics Leads with an Upside Breakout

by Arthur Hill

Verisk (VRSK) was not immune to the volatility of the last two weeks, but the stock held up well during the dip and outperformed during the bounce. First, notice that the stock ultimately held the mid May low and 200-day SMA during the late June dip. Second, notice that the stock exceeded the 22-June high with the surge over the last five days. Stocks and ETFs trading above their June highs right now show relative "chart" strength.  The overall pattern and two key moving averages also point to an uptrend. First, the stock surged from early February to Read More 

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The REITS And Trusts Continue To Run (NSA)

by Greg Schnell

In a yield-seeking world, the story for REIT's and Trusts seems stronger than ever. The stable cash flow in an otherwise turbulent world is attracting the investment dollar. The REIT's are giving the financial sector support, but the sector as represented by the XLF is still trending down. National Storage Affiliates Trust (NSA) IPO'd a little over a year ago and has been rising ever since. While it is in a weak sector, the REIT's and Trusts within the financial sector are performing well. This particular Trust has a yield close to 4% and it is Read More 

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New High Surge Shows Broadening Participation

by Arthur Hill

The S&P 500 surged over the last four days and new highs in the S&P 500 expanded to their highest level since March 2015. The chart below shows $SPX surging around 5% in four days and new highs exceeding 80 the last two days. Even though the index did not exceed its May or November highs, new highs expanded significantly and this shows broad strength in the S&P 500. This means 16.4% of stocks in the S&P 500 hit new highs on Friday. Not bad at all. I will show how to create this chart after the jump.  This chart was created by selecting Read More 

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This Energy Stock May Not Be A Pipe Dream

by Tom Bowley

Over the past six months, the Dow Jones U.S. Pipelines Index ($DJUSPL) has gained 25.03% and has been among the best performing industry groups.  But it hasn't been favorable for all pipeline stocks as Williams Companies (WMB) can attest.  While its peers have risen 25%, WMB is down 14% as an atrocious January held back an otherwise strong rebound that began in the second week of February.  The strength over the past five months has been evident as its daily MACD has been in positive territory for the past three months or so.  WMB is down more than 10% over the past two Read More 

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Can You Win With Defence? What The Money Is Saying

by Greg Schnell

The Brexit vote made large 5% swings in the market both ways this week. What could possibly be next?  After a major market event, watching the rotation of money into the various sectors can help us understand where investors are getting positioned. Rolling through the charts, the XLP had a huge breakout above 3-month resistance today. A brief review of the chart shows that the Staples sector has been working its way higher since the August lows of last summer. The MACD is positive and on a buy signal, the volume accelerated this week, the $SPX Relative Strength made new Read More