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Second Shoe Looks Poised to Drop for Whole Foods

by Arthur Hill

It has been a rough summer for Whole Foods Market (WFM) as the stock plunged in June and late July. Both declines were sharp and featured big gaps. The stock did bounce between the two declines, but formed a lower high in late July. Most recently, WFM has been consolidating after the July gap-plunge (blue shading). This consolidation could represent a rest after the first shoe dropped. A support break at 30 would suggest that the second shoe is dropping and target a move to new lows. The indicator window shows the SCTR below 15 since late July and this is one of the weakest stocks in the Read More 

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Goldman Sachs (GS) Bags Fresh 6 Month Highs

by Greg Schnell

Goldman Sachs (GS) is a big name financial that broke out to new 6-month highs today. Citi (C) also broke out to new 6-month highs. Wells Fargo (WFC) was popping higher today, Bank of America (BAC) has been running, and JP Morgan (JPM) looks like it wants to take out all time highs.  The big US banks, brokers, and insurers are really moving. This trend has been building for a month, but the breakouts above previous highs have just been in the last week for most of them. I'd recommend taking the time to look across the financial sector. Good trading Read More 

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Insurance SPDR Leads Finance Related ETFs

by Arthur Hill

Stocks in the finance sector have been strong the last four days with the Insurance SPDR (KIE) showing chart leadership. Note that the Finance SPDR (XLF), Broker-Dealer iShares (IAI) and Regional Bank SPDR (KRE) are all up over the past week, but KIE is the only one trading at a new 52-week high already. This means the KIE chart is the strongest of the group. On the chart below, KIE stalled at resistance in mid August and broke clear with a big move the last three days. The broken resistance zone around 72.5-73 turns into the first support zone to watch on a throwback. The indicator window Read More 

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Nautilus Does Some Heavy Lifting On Friday

by Tom Bowley

Nautilus (NLS) officially became a technical heavyweight on Friday as its stock price soared through price resistance to a fresh new 52 week high, bouncing bullishly off its rising 20 day EMA in the process.  Volume supported its first very bullish gap in early August and it once again confirmed yesterday's gap and breakout session.  Take a look: The StockCharts Technical Rank (SCTR) surged above 80 as NLS has become very strong technically among its peers.  If there's one negative here, it's that the volume can dry up when the stock isn't in the news and that could lead to Read More 

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Bank Of America (BAC) Approaches 2016 Highs

by Greg Schnell

Bank Of America (BAC) has been migrating higher over the last few months off the Brexit lows. As Bank Of America approaches the highs for 2016, the chart has some interesting traits. The last time BAC got near $15, the SCTR ranking was poor, sitting around 30. That means that 70% of the large-cap stocks had better price action than BAC. This trip to $15 is showing something totally different. While BAC has been climbing in a daily push higher, the price action is better than 80% of the large caps! The Relative Strength of BAC shown in purple has not been able to break out of the range yet Read More 

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Slowing Momentum And Negative Divergences Are Wreaking Havoc On Equities

by Tom Bowley

The U.S. stock market has been suffering from a series of negative divergences that have run rampant throughout many sectors and industry groups.  As one weakening group sells off, money rotates to another strengthening group.  We have not been seeing wide participation moves to the upside.  The sector performance over the past month underscores this.  The energy sector (XLE) is higher by 4.05%.  The utilities sector (XLU) is lower by 4.59%.  Technology (XLK) has risen 2.49%.  Healthcare (XLV) has fallen 2.03%.  With respect to the latter, medical Read More 

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Oil & Gas Equip & Services SPDR Breaks Wedge and Underperforms

by Arthur Hill

The Oil & Gas Equip & Services SPDR (XES) looks vulnerable because the bigger trend is down and the ETF just broke a wedge trend line. The chart shows the 50-day EMA (green) below the 200-day EMA (red) and this suggests that a long-term downtrend remains underway. The ETF got a bounce in August, but a rising wedge formed and XES broke the wedge trend line with a decline the last three days. This reverses the short-term upswing and signals a continuation of the bigger downtrend. The indicator window shows MACD flattening out just above the zero line. A downturn and move below the Read More 

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Morgan Stanley (MS) Stretches Above Resistance

by Greg Schnell

Morgan Stanley (MS) has built a nice base and has been pushing above resistance for the last week. There are a few more clues that I like on the chart. The Relative Strength is just starting to break out above 6-month highs and the SCTR has moved above 75 which puts it in the top quartile for price action. The price has broken above the horizontal resistance layer. The PMO keeps accelerating higher which suggests a nice uptrend.  While everything looks a little stretched here, this looks like it is setting up for a nice long position. Trading it Read More 

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The Dow's Amazing Symmetric Triangle

by Chip Anderson

The Dow did something strange and wonderful today on its intraday chart: A perfect symmetric triangle pattern!  But one with really strange jumps up and down throughout.  Truly fascinating.  Usually Symmetric Triangles are "Continuation" patterns, which typically break in the direction of the trend prior to their formation.  But the Dow has been moving sideways for several days now so I'm not sure what this would be a continuation of. More generally, Triangle patterns (also called "Coils") show that there is a big disagreement between the bulls (the Read More 

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Mattel Challenges Resistance with Signs of Accumulation

by Arthur Hill

Mattel (MAT) led the market from early October to early February with a 65 percent advance and then moved into a large consolidation the last six months. More recently, the stock surged off support in late June and then formed a smaller consolidation near resistance. Notice that the stock advanced with good volume on Monday and this could foreshadow a breakout. The lower indicator window shows the Accumulation Distribution Line moving higher during the larger consolidation. This suggests buying pressure within the consolidation and increases the chances of an upside breakout.  Read More 

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Merck Breaks To An All-Time High

by Tom Bowley

One company's failure can be another company's catalyst.  Take for instance Merck & Co (MRK), who on Friday, August 5th surged to an all-time high after Bristol Myers (BMY) had a failed clinical trial of its lung cancer drug.  BMY had clearly been outperforming MRK for several years up until this news hit.  Since then, the two have been moving in opposite directions with MRK closing at its all-time high.  Check out this chart: MRK's uptrend likely isn't over as its monthly RSI has not yet hit overbought territory.  I would expect more weakness in BMY Read More 

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Biotech Is Broadening As An Arrowhead (ARWR) Soars

by Greg Schnell

Biotech has been moving up recently as a part of this bullish trend. XBI is one of the many Biotech ETF's. The SCTR breakout is nice to see and the ETF has formed a nice up-trending channel. As more Biotechs participate, there are some fresh breakouts showing up. Today is a small cap with some nice technical signals. Arrowhead Pharmaceuticals (ARWR) is breaking above a 10-month base. The SCTR has been perking up lately and gave us an early warning things were improving. The Relative Strength is breaking to new highs. With the nice price action breakout, this looks interesting.  Read More 

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Will The Real Twitter Please Stand Up?

by Tom Bowley

There aren't too many stocks under the same scrutiny as Twitter (TWTR) and expectations range from wildly bullish to wildly bearish.  So what is a trader to do?  Well, I'd ignore all the news headlines, which lately have gone full circle from potential buyout rumors to possible affiliation with Apple TV to this morning's downgrade and sell rating.  Twitter stood below 16 three weeks ago after it reported poor quarterly results.  Then it soared more than 30% as the buyout rumors and Apple TV connections hit the Street.  The past couple days we've seen some mild Read More 

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Baidu Goes for Breakout after Long Stall

by Arthur Hill

Baidu ($BIDU) has basically gone nowhere since 2014, but the stock is showing signs of buying pressure recently with a wedge breakout. First, the weekly chart shows the stock surging some 200% and moving above 170 for the first time in late 2013. The stock peaked in late 2014 and then fell sharply in 2015. A triangle then formed over the last 9-12 months as the stock battled the 170 area (blue shading). The red zone marks long-term resistance. We will look at the daily chart after the jump.  The next chart shows price action over the last seven Read More 

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GoPro (GPRO) Breaks Free Of Its Mount

by Greg Schnell

GoPro (GPRO) has been sliding in investor sentiment for a year. After falling below the 200 DMA over a year ago, GPRO continued to splash around in the dirt. Today it seems to be launching out of a base as we head towards the retail season for youth with Back to School. The SCTR was asleep for the last 9 months and started trending up in July. I like to look at stocks where the SCTR is consistently poor and then starts to wake up. There can be a change in investor sentiment starting to show and this can lead to explosive moves higher. While the change is hard to see on the Relative Read More 

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DR Horton Looks Poised to Continue Bigger Trend

by Arthur Hill

DR Horton (DHI) is part of the housing group and the stock is in a long-term uptrend. I based this trend assessment on three things. First, the 50-day EMA is above the 200-day. Second, the 200-day EMA is rising. Third, the stock hit a 52-week high in July. DHI pulled back after hitting this high and firmed in the broken resistance zone. This is a classic tenet of technical analysis: broken resistance turns support and vice versa. It looks like this pullback is ending because DHI surged around 2% on Monday and the PPO (5,30,1) moved above its 5-day EMA.  Read More 

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Here's A Trucker Looking For Gap Support

by Tom Bowley

YRC Worldwide (YRCW) recently posted quarterly results that blew away Wall Street consensus estimates with EPS reported at $.83.  The estimate was for just $.51.  That news was well received by traders as YRCW gapped up and opened at 10.98 on July 29th and never looked back.  After becoming overbought, however, YRCW has pulled back and is approaching that key gap support level, while also nearing its rising 20 day EMA.  I'd look for YRCW to turn somewhere in this 10.98-11.14 range.  Check out the chart: Note the very strong volume to support Read More 

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Alibaba (BABA) Finally Breaks Out Of A Base

by Greg Schnell

Alibaba (BABA) finally gave investors the move they have been waiting for since the IPO. A surge into the price action that represents a top performing stock. Notice the improvement this week taking the SCTR to 97. This is a great move by a stock and investors are buying the shares. With the technical breakout above resistance and a follow through day shown on the daily, this looks very bullish. The volume associated with the breakout and the MACD soaring to the highest levels yet, suggests the move is starting. This looks like the performer many people expect Alibaba to be Read More 

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This Clothing Retailer Has Your Back

by Tom Bowley

The Dow Jones U.S. Clothing Accessories Index ($DJUSCF) has been challenged technically with a long-term downtrend and a short-term uptrend currently in play.  It'll be interesting to see which way this index breaks, but if the overall market holds any clue, then the DJUSCF will likely break higher.  I included the DJUSCF chart in my Trading Places blog earlier today and you can access it by CLICKING HERE. One component of this index, however, just reported very strong earnings and was rewarded handsomely was Ralph Lauren (RL).  A long-term downtrend was broken Read More 

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Solar ETF Fails at Resistance Yet Again

by Arthur Hill

The Solar Energy ETF (TAN) got a nice bounce along with the stock market from late June to early August, but this bounce has now reversed and it looks like the bigger downtrend is resuming. The chart shows the highs from late May and early June marking resistance in the 22.25 area. This area also coincides with the 50-62% retracement zone, which is a typical retracement amount for a counter-trend rally (correction). Resistance has clearly held as the ETF gapped down on Wednesday and it looks like the long-term downtrend is resuming. Note that TAN hit a 52-week low in late June and the SCTR Read More 

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Valeant Pharma (VRX) Makes A Valiant Trend Changing Move

by Greg Schnell

Valeant Pharma (VRX, VRX.TO) has been the world's best whipping post for buy and hold investors. High-profile investors like Pershing Square have had this millstone stock dropping 90% from the highs. But every now and then, even a "sleeping dog" stock starts to improve. Valeant has some interesting traits going for it for bottom fishers. You might need some headache medicine to own it, but from a technical standpoint, it has some redeeming features. First of all, it has been the worst stock for over 6 months. Anyone who wanted to sell it has had plenty of reasons to let it go. The Read More 

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Schlumberger Confirms Bullish Continuation Pattern

by Arthur Hill

Schlumberger (SLB) broke above resistance today and this breakout confirms a bullish ascending triangle. First, note that the bigger trend is up because the 50-day EMA is above the 200-day EMA. Chartists can also plot this difference using the Percentage Price Oscillator (50,200,1), which is shown in the indicator window. Notice how it turned positive as the 50-day crossed the 200-day in early June. On the price chart, the ascending triangle formed from mid April to early August. The equal highs mark horizontal resistance and the higher lows reflect buying pressure coming in a higher price Read More 

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Is This The Week To Buy Apple (AAPL) Stock?

by Greg Schnell

Apple (AAPL) has a couple of great things going for it. Earnings were just announced and it has a few months to run before the next earnings. It also is running up into the release of the iPhone 7. The second iteration of the watch might be released as well. The iPad Pro is also getting good reviews. All of that is just fluff. The real reason for me to own Apple here is a trend change in the way Apple is performing through investors. In the world of Technical Analysis, trend change is king. Apple (AAPL) changed trend this week and investors are buying into the story. First, let me Read More 

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Dun & Bradstreet Breaks Out of Consolidation To Lead Publishers

by Tom Bowley

The Dow Jones U.S. Publishers Index ($DJUSPB) has broken a downtrend on its weekly chart and Dun & Bradstreet (DNB) is one of the best looking companies within this index.  DNB posted revenues and EPS that bested Wall Street consensus estimates on Monday after the bell, then proceeded to clear multi-year price resistance on heavy volume.  A strengthening stock within a strong sector (in 2016) is normally a smart way to ride a bull market.  Check out the chart: There's a lot to like about this chart, but it could get better.  The DJUSPB has been downtrending vs. the Read More 

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Finance Sector Perks Up as JP Morgan Forms a Flag

by Arthur Hill

One would not think it from the price charts, but the Finance SPDR (XLF) and several banking stocks are outperforming the S&P 500 SPDR (SPY) since late June. XLF, KRE and many banking stocks are trading below their spring highs and SPY is trading near a 52-week high. The PerfChart below shows the performance for SPY, XLF and seven banking stocks from 27-June to 2-Aug. I chose 27-June for the starting point because this is when the most recent leg up started. Notice that XLF is up more than SPY and five of the seven stocks are up more than SPY. These stocks are outperforming the broader Read More 

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The Banking ETF (KBE) Continues To Fail Technically

by Greg Schnell

One of the difficult parts of the current market is the dichotomy between the rally to new highs in the indexes and the continued struggles of the banking group with its third lower high in the past year. KBE is the SPDR ETF for the big banks. When the banks don't participate that is usually worrisome. If we walk through the indicators one at a time, there is some valuable advice there. The SCTR is below 50. We can see a horizontal line placed at the 50 level. Currently, the Bank ETF SCTR is at 26.3 making it one of the worst-performing ETF's. The ETF is underperforming the broad moves in Read More 

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Plotting 52-week Highs on the Microsoft Price Chart

by Arthur Hill

Chartists can plot 52-week highs right on the price chart by using the Price Channels overlay. The upper line of a 52-week Price Channel marks the high of the last 52-weeks, the lower line marks the low and the middle line is the average of the two. By plotting this indicator on the price chart, chartists can immediately see when a stock records a 52-week high or low. In addition, chartists can see how far a stock is from a 52-week high (or low). The chart below shows Microsoft (MSFT) with weekly bars and the 52-period Price Channel. Notice that the stock recorded 52-week highs throughout Read More