Don't Ignore This Chart

December 2016

Don't Ignore This Chart

2016 Year In Review - Commodities

by Greg Schnell

When we look back on 2016, we can add a few tips to our trading journals. Lots of key moments created great buying opportunities. After years of commodities being routed, it was a year for commodities to create fantastic returns. While many Main Stream Media channels focus on the commodities, the majority of the moves happen in the companies related to the commodities. From the two sectors (Materials and Energy) that generated some phenomonal individual company returns, it is worth looking back to add tips into our trading journal for future use. Here Read More 

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Multi Sector Income Trust Yields 8.5%

by Greg Schnell

It was only a few weeks ago when the fundamental commentary was about the money that would be lost by owning defensive sector stocks. This BlackRock Multi-Sector Income Trust (BIT) generates 8.5% and closed out the year hitting a new 52 week high! While everyone was trying to outperform the market with aggressive stocks, this income strategy paid out very well. If the overall market is setting up for a pullback in January, this looks like a nice chart profile that can help you sleep through the night.  Good trading and Happy Read More 

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NVDA's Magic Ride Likely Over

by Tom Bowley

NVIDIA Corp (NVDA) has been one of the best performers of 2016, nearly quadrupling during the year.  Its long-term chart has been phenomenal, but its weekly RSI and stochastic have been overbought since early May.  That's a very long time of outperformance and a rest is not only likely, but also necessary technically.  In a trending stock like NVDA with strong mometum, I look to 20 week EMA for key support.  Because of the parabolic rise in NVDA shares, the 20 week EMA currently resides at 80.92.  But the shorter-term bearish signal was provided on Wednesday Read More 

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Facebook Continues to Stall - Here's What to Watch $FB

by Arthur Hill

The Nasdaq 100 ETF and S&P 500 SPDR hit new highs in mid December, but Facebook (FB) did not partake in these new highs and remains stuck in a consolidation. Even though relative weakness since late October is negative, the stock remains in a long-term uptrend and we are in a bull market. The uptrend and bull market carry more weight, in my humble opinion. On the price chart, I am watching the small triangle that formed over the last six weeks. A downside break at 115 would be bearish and target a move into the green support zone. An upside breakout at 123 would be bullish and suggest Read More 

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Can Freeport McMoRan (FCX) Find Support After Breaking Out?

by Greg Schnell

Freeport McMoran (FCX) is a worthy of a novel related to Technical Analysis of price action alone. Critical parts of the chart outline some interesting times for FCX. First, classic resistance at old highs is a theme. Notice the 2011 peak at the same levels as the 2007 and 2008 peaks. That coincides with the metals commodities topping in 2011.   When oil topped in 2014, Freeport McMoRan topped at the same levels as the 2012 highs, which was while FCX was negotiating the purchase of Plains. That $35-$37 level was friction for three years amidst the commodity slide of basic Read More 

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Priceline: Name Your Own (Entry) Price

by Tom Bowley

I ran a scan of NASDAQ 100 stocks with RSIs between 40-45 and it returned eight stocks - ATVI, BIDU, FB, JD, PCLN, QVCA, VIAB, VOD.  I ran this scan because RSI 40-45 many times offers up great support to an uptrending stock.  So the next step, of course, was to review the eight charts to see if I liked the setup of any.  VIAB was at an interesting price support level near 34-35, but most of these stocks were seeing their RSIs rise to 40-45.  I was looking for an uptrending stock that has seen recent weakness and an RSI that has fallen to 40-45 Read More 

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Clovis (CLVS) Breaks Through To 52 Week Highs

by Greg Schnell

Clovis Oncology (CLVS) had a big week as a Christmas present for investors. But the chart tells us another story. Back in 2013, the stock gapped above $40 and went on a run to $86. After a tumultous pullback to $35, the stock went on another run to $116. Late in 2015, the stock lost 75% in a day. A really bad day at the office. After losing another 50% from there, the stock finally found a bottom. This week, the stock pushed back through the major support / resistance area around $38. With volatility so disruptive, a small position size is warranted, but the current push looks to be Read More 

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AMAT's Candle Suggests A Reversal Is Imminent

by Tom Bowley

Applied Materials (AMAT) printed a shooting star candlestick on Thursday, with a long-term negative divergence in play on both its daily and weekly charts, signs of slowing momentum to the upside from both an intermediate- and long-term perspective.  AMAT, just a few days ago, printed a reversing dark cloud cover candle, but still managed to clear that high with today's intraday high.  But today's reversal and overall lighter volume of late suggests the near-term is dicey at best.  Check out the chart: There have been three separate negative divergences on the AMAT chart Read More 

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US equities are good, Japanese are better - for now.

by Julius de Kempenaer

The Relative Rotation Graph above holds a number of (world) equity indices compared to the FTSE all world index as the benchmark, using daily data. For those of you who are following my regular RRG blog, this means a shorter-term view than you are used to from me. The rotations that stand out in a negative way are the stock markets of Hong Kong $HSI), China ($FTX) inside the lagging quadrant, and Singapore ($STI) which is still inside the weakening quadrant but rapidly approaching a crossover into lagging, backed by a long (=strong) tail. From Read More 

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Pfizer (PFE) Tests The 200 DMA

by Greg Schnell

Pfizer (PFE) has been working lower since the summer. The end of July has been an inflection point for quite a few of the defensive stocks. Pfizer stands out as a mega cap paying about a 4% yield with daily volume averaging around 28 million shares a day. So there is no shortage of interest, but it has been a 20% drop off the top. Now Pfizer is back in the middle of the range hovering around the 200 DMA.  We can see the SCTR has been under 50% for the last three months. I find the 50% level on the SCTR to be pretty important on defensive mega cap stocks. So far, PFE is still Read More 

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Defensive Sectors Hit Moment of Truth

by Arthur Hill

The HealthCare SPDR (XLV), Consumer Staples SPDR (XLP) and Utilities SPDR (XLU) are lagging the broader market in 2016, but they are now challenging their 200-day moving averages with bounces this month. The chart below shows these three sectors peaking in July-August and moving lower the last four to five months. Despite weakness since summer, these three bounced in December with staples and utilities leading the nine sectors this month. At this point, I would consider this a bounce within a downtrend because we have yet to see resistance breaks. The lower windows show XLU and XLP trading Read More 

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Ryder Driving The Wrong Way

by Tom Bowley

Ryder System (R) was having a huge 2016 until the past several days.  Profit taking has kicked in and R has dropped 10% in that brief span.  The obvious question from a trader's perspective is..when does it make sense to jump in on the long side.  Well, I tend to gradually enter a longer-term healthy stock that's struggling near-term.  So here's the daily chart to first look at short-term support levels: The negative divergence suggests we could see a 50 day SMA test and a MACD centerline reset so that suggests perhaps an entry closer to 73.  The prior Read More 

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Do You Want Insurance At New Highs - Progressive (PGR)

by Greg Schnell

Progressive (PGR) is making a new high to close out the week. Flo looks happy about it! Photo:Courtesy of Progressive.com When the chart starts popping, it's time to pay attention. This chart has a beautiful 5-year up trend going on. It recently took a few months off but now it continues to accelerate. The stock has been a strong performer and the SCTR is just pushing back into the top quartile. There is lots of volume hitting the stock, so this sudden surge is really moving. The macro trend for the stock is very strong and this move looks like a Read More 

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Medical Supplies Breaks Out Of Bullish Wedge

by Tom Bowley

Healthcare stocks (XLV) have been underperforming the benchmark S&P 500 for the past 4-5 months, but they're beginning to show some life as the XLV has been the best performing sector ETF over the last week.  Recently, I noticed pharmaceuticals testing a major price support level and they've begun to bounce, rising 4.52% over the past week.  Next up appears to be the Dow Jones U.S. Medical Supplies Index ($DJUSMS).  Their one week gain has been a more modest 2.35%, but check out the bullish technical developments on the chart: Today's close has cleared wedge resistance Read More 

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What's the Deal with that Intraday Volume Spike on the Dow?

by Arthur Hill

There has been a big change to intraday data for S&P Dow Jones Indices and chartists using volume indicators should take this into consideration. Basically, S&P Dow Jones started using data from the "Consolidated Tape of all recognized U.S. exchanges". This change resulted in a dramatic increase in reported volume from one day to the next. The chart below shows the Dow Industrials with 30-minute bars and volume. Notice how the volume bars exceeded the 20 million mark only once from November 15th until December 2nd. That suddenly changed on December 5th as the individual volume bars Read More 

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Using The SCTR With Johnson & Johnson (JNJ)

by Greg Schnell

JNJ is one behemoth of a Healthcare company. It dominates in so many areas. Recently are the big cap healthcare companies have been out of favor. Usually, I like to look for strong stocks getting stronger. However, when some large caps give you a big pullback, it can be a timely place to look at the stock. Today, JNJ looks interesting. I plotted two lines on the SCTR. One at 25 and one at 75. The reason is that JNJ rarely drops down below 25% and it usually is a great buying opportunity for the stock. Now that it looks to be headed back above 25, that can be a valuable entry into a great Read More 

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Small-caps Lead New High List

by Arthur Hill

As a percentage of total issues, small-caps are churning out more new highs than large-caps and leading the market. The chart below shows new highs (green) and new lows (red) for the S&P 500, S&P MidCap 400 and S&P Small-Cap 600 over the last eight months. Notice that there were 61 new highs in the S&P 500 on Friday, 95 new highs in the S&P MidCap 400 and 178 new highs in the S&P Small-Cap 600. As a percentage of the total issues, small-caps are leading the charge because over 30% of stocks in the index hit new highs. Also notice that new highs exceeded 100 twice Read More 

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A Bottom May Be Brewing In BUD

by Tom Bowley

The U.S. stock market has been flying high over the past month, but shares of Anheuser-Busch InBev (BUD) have fallen close to 30% since reaching an all-time high in late September.  Technically, there's hope that BUD is at or approaching a very significant bottom, however.  Let's take a look at a shorter-term daily chart and then a longer-term weekly chart: Shorter-term: Longer-term: The daily chart now reflects a slowing of selling momentum, at least in terms of price action.  This slowing is also occurring at a key price support level near 100 on the Read More 

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CF Industries Starts The Run

by Greg Schnell

I put up CF Industries on an RRG Chart and saw it just soaring. Here is a link to the live chart. That CF chart also looks beautiful in a StockCharts SharpChart.  The stock is still half price to what it was a year ago, suggesting there is more room to run. Seeing the SCTR accelerate out of an oversold base is a beautiful signal once again. I covered off some of the Agriculture related charts on my webinar on Thursday. Commodities Countdown 2016-12-08. You can catch other trade ideas from me on Twitter @Schnellinvestor. Read More 

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Measuring An Inverse Head & Shoulders Breakout

by Tom Bowley

It took two months of consolidation, but Cabot Corp (CBT) finally pulled it off.  It cleared neckline resistance in its inverse head & shoulders pattern at the 52.50 level.  One of the keys of any continuation pattern is that it requires a prior trend in place to continue.  CBT trended higher throughout July, August and September and then its SCTR ranking channeled lower as it consolidated in its recent inverse head & shoulders pattern.  The breakout occurred today on nice volume and here's how it looks visually: Now as it's broken out above price Read More 

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Can Apple Follow through on Weekly Reversal?

by Arthur Hill

Apple (AAPL) reversed its long-term downtrend with a series of breakouts this summer and the stock is currently trading over 20% above its May low. Notice how the stock broke the early June high, the red trend line and the 40-week EMA with a surge in July-August. The 10-week EMA also crossed above the 40-week EMA in August. Even though the stock underperformed in October-November, Apple found support near the rising 40-week EMA and could be poised to continue higher.  Notice how the stock formed a hammer-like candlestick four weeks ago and then stalled around Read More 

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Bunge (BD) Does Some Jumping

by Greg Schnell

There have been some Agriculture related stocks pushing to new 52 week highs recently. I wrote about Agrium (AGU.TO, AGU) recently. Today, Bunge (BD) jumped up to a 52-week high. This $10 Billion market cap company has just completed a one-year base and looks set to move higher. I usually like the SCTR to break into the top quadrant (above 75%) in relative strength. This appears to be climbing higher and recently pushed above 75. WIth the breakout to new highs in price and the S&P relative strength at retesting 9 month highs, this looks like the strength is improving Read More 

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Italian and German Indexes Battle Different Sides of Key Moving Average

by Arthur Hill

The chart below shows year-to-date price action for the Milan Index ($MIB) and German DAX Index ($DAX). Note that the MIB is down around 22% year-to-date and the DAX is down around 2% since January. In contrast, the S&P 500 is up around 6% so far this year. The next directional move for European stocks could hinge on these two indexes. The Milan Index is in a downtrend overall and just below the 200-day SMA. The highs extending back to August mark resistance in the 17000-17500 area and a breakout here is needed to reverse the downtrend. Such a move would be quite bullish for Italian Read More 

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Weekly MACD Turns Negative On This Group For First Time In Five Years

by Tom Bowley

I pulled up one month returns for all industry groups and there were several groups that have performed quite poorly over this period, despite the overall market strength.  Toys ($DJUSTY) are down 6.78% over the last month, but a negative divergence on its weekly chart is likely the culprit.  Internet stocks ($DJUSNS) have fallen 4.59%, but the pullback to 1100 was somewhat warranted after a huge run up.  Gold mining ($DJUSPM) fell 14.02%, but in my opinion has been a lagging group for quite awhile and given the dollar's strength, we'll likely see more selling in this area Read More 

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Is Tesla (TSLA) About To Hit The Ditch?

by Greg Schnell

On a week where GM and Ford had nice positive pushes, Tesla (TSLA) fell almost 8%.  So how do we handle Tesla from here? It looks to me that Tesla is testing this major support area after breaking it back in January. How investors treat the stock is critical at this juncture. First of all, the SCTR is under 5. So 95% of the stocks are behaving better than TSLA. That's a problem. If support breaks here, this looks like a big potential drop. Secondly, we can see that TSLA's SCTR has been unable to stay in the top 25% for the last year. This poor performance is increasing as we see the Read More 

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Waiting On This Inverse Head & Shoulder Breakout

by Tom Bowley

Xilinx (XLNX) is a $13.5 billion semiconductor company and it nearly broke out of a very bullish inverse head & shoulders pattern on heavy volume today.  But it didn't.  Instead, it reversed lower along with most semiconductor stocks and tested its rising 20 day EMA.  The technical picture here still remains quite bullish as you can see from the chart below: The biggest problem for XLNX right now isn't XLNX.  It's the weak relative performance of all technology stocks.  The Dow Jones U.S. Semiconductor Index ($DJUSSC) fell 4.5% on today's session Read More