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Gilead (GILD) Bounces While Market Drops

by Greg Schnell

Gilead (GILD) has an interesting chart setup this week. Gilead has been bouncing while the US markets have had their worst two day stretch in a while. So let's define the chart setup and the risks. In early December, Gilead tested below $71. The next week it rallied almost 8%. Then, while the broader markets stabilized sideways, Gilead range traded 5% week after week. In early January, Gilead tried to rally again and was stopped by the downtrend line. Now the two trendlines have a range less than $4 between them. That puts the risk setup pretty low with a great company and the Read More 

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Hang Seng Reverses after a Normal Correction

by Arthur Hill

The Hang Seng Composite ($HSI) is having a good year with a 6% gain year-to-date. The weekly chart also looks bullish because the big trend is up and a correction just ended. First, the index broke resistance with a sharp advance from late June to early September. Second, the index hit a 52-week high in early September. Third, the 10-week EMA moved above the 40-week EMA in early August.  After hitting a 52-week high in early September, the index decline with a retracement and pattern that are typical for corrections. First, the falling wedge back to Read More 

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Nvidia (NVDA) Who Could Be Thinking Bearish?

by Greg Schnell

I can be as wrong as the next guy when it comes to Bullish, Cautionary or Bearish, so I’ll lay out my thoughts and you can ponder them, discard them, laugh at them, whatever you choose. I do not own NVDA, so its a lot easier for me to say the interim top is close at hand. These are my thoughts, the market may have others. Trade it based on your thoughts. This is not a buy or sell recommendation. Looking at the chart below, using the SCTR can be as difficult as other indicators. It is never easy with whipsaws and false signals. The continued testing of the 75 level through Read More 

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Seasonality Tool Helps You Plan Your Trades

by Tom Bowley

I am always aware of typical historical strength that lies ahead.  Along those lines, it's important to note that the Dow Jones U.S. Travel & Tourism Index ($DJUSTT) has been the fourth best industry group in terms of February performance.  priceline.com (PCLN), a component of this index, not only shows this same strong historical strength, but it outperforms its peer group during the month of February.  So keep in mind that investing in PCLN in February in the past has been extremely profitable.  Here's how PCLN has performed during each calendar month over Read More 

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Baidu Forms a Bullish Pattern within a Massive Triangle (plus a Chaikin Money Flow Technique)

by Arthur Hill

Baidu (BIDU) has gone nowhere for a year as a large triangle pattern formed on the weekly chart. There are, however, signs of support and a short-term bullish pattern is emerging on the daily chart. First, the weekly chart shows a triangle that extends from around 120 to 218 at the widest point in late 2015. The range consistently narrowed throughout 2016 and extended from 162 to 198 the last three months of 2016. The narrowing range tells us that volatility is contracting and chartists should be alert for a volatility expansion (big move).  Signs of Read More 

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Freeport McMoran (FCX) Jumps To New Highs

by Greg Schnell

Freeport McMoran (FCX) is jumping to new highs today on the back of renewed interest in Copper and Gold. This is an excellent entry for breakout buyers. The MACD is just turning up again above zerom the volume on today's breakout is above average and the SCTR is at 97.8 so there is lots of strength here. You might have to give it room with your stop at $15.25 to allow it to consolidate. If you are interested in my most recent education tip, click here. The education tip on Bullish Percent Indexes is in the second 1/2 of the article. For members, I'll send you a Read More 

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Home Depot Leads with Flag Breakout and 52-week High

by Arthur Hill

In what could be a good sign for housing and the economy, Home Depot (HD) exceeded its summer highs and hit a 52-week high. Home Depot is an interesting company because can be considered part of the housing industry and the retail industry. These two industries are very important to the consumer discretionary sector and this is the most economically sensitive sector. The chart below shows HD getting its first higher high with the November surge and break above 130. The stock then stalled with a small wedge/pennant and broke out with another surge in December. HD formed another bullish Read More 

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Check Point Breaks Out Of Very Bullish Pattern

by Tom Bowley

My favorite kind of stocks are those that advance and then base for an extended period of time before breaking out.  The consolidation period rids the stock of weak holders, providing a much better foundation for a sustainable rally.  Check Point Software Technologies (CHKP) fits the bill after reacting quite positively to its latest quarterly earnings report, beating Wall Street consensus estimates on both the top and bottom lines.  Best of all, technical conditions are very strong as you can see below: While the breakout is clear and momentum is strong, CHKP is very Read More 

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Netflix Flashes A New High (NFLX)

by Greg Schnell

Netflix continues to deliver content to homes and profits to investors. After reporting good numbers vs. expectations, Netflix popped up to new highs. It wasn't all scrolling credits for the company as the stock sold off continuously on Thursday after the huge gap to new highs. This is a weekly chart that looks good as long as the stock holds the breakout above $130.  The weekly chart does not show todays selling, so I'll use a 1-month chart of 60-Minute candles. Considering the good report, there were a lot of sellers taking profits. Read More 

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FAST Makes A Quick Move Higher

by Tom Bowley

I wrote about Fastenal (FAST) in this blog just two weeks ago.  This is a stock that had been in a sideways consolidation pattern for many years after a prior uptrend.  So I was looking for the next breakout.  However, when a stock consolidates for years, you want to see the actual breakout before jumping on board.  Otherwise, you could have capital tied up for a long, long time with nothing to show for it.  Well, the breakout was finally made simultaneously with its quarterly earnings release earlier this week.  Check out this long-term weekly chart: Read More 

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BroadCom Holds Gap Zone and Resumes Breakout

by Arthur Hill

BroadCom (AVGO) is showing upside leadership again with a flag breakout last week and a 2% surge today. Overall, the stock advanced to a 52-week high in August and then embarked on a long consolidation. A large symmetrical triangle formed as the stock traded flat from September to early December. The bigger trend was clearly up during this consolidation and a consolidation within an uptrend is usually a bullish continuation pattern. It represents a rest within the uptrend and a breakout signals a continuation higher. AGVO broke out with a gap-surge in mid December and then fell back with a Read More 

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Walgreens Boots Alliance Kicks Up WBA

by Greg Schnell

Walgreens Boots Alliance (WBA) has recently pushed above a breakout level and then pulled back to retest. Today, the stock looks ready to breakout above the previous resistance shown in red again. Thinks looks like an important area to watch. If defensive stocks start to accelerate, this is well positioned to be one of the first to break out. The MACD is bouncing close to the zero line after pushing to a fresh 6-month momentum high in December. The down days recently have been on light volume while the up days have been on higher volume. Thats a positive. The overall Read More 

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Fewer New Highs, but Even Fewer New Lows

by Arthur Hill

The chart below shows the High-Low Line for the S&P 500, new highs/lows as a histogram, and the S&P 500. Notice that new highs exceeded 50 several times from mid November to mid December. This showed good internal strength because over 10% of stocks in the S&P 500 were hitting new highs. New highs have since dwindled and did not surpass 50 since December 12th. This shows less strength within the index, but we have yet to see a serious expansion of new lows.  The top window shows the High-Low Line, which is a cumulative measure of Net New Read More 

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We May See Major Resistance Test On 10 Year Treasury Yield In 2017

by Tom Bowley

Banks threatened another breakout on Friday before stalling and dropping after an early morning surge higher.  Bank of America (BAC) credited higher interest rates for its earnings beat Friday morning and said it was anticipating significantly higher net interest margins in 2017.  So how much higher will the 10 year treasury yield ($TNX) move?  Well..technically, it's easy for me to imagine the TNX rising to test a major yield resistance level at 3.00% and its long-term downtrend line closer to 3.50% sometime during 2017.  With a TNX close at 2.38% on Friday, there's Read More 

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Mastercard Taps New Highs (MA)

by Greg Schnell

Mastercard (MA) does not seem to be impaired with the slowdown in the retail stocks. This chart is bottom left to top right! Today, Mastercard pushed to new highs and at time of writing was just off the highs. With the SCTR above 75, price breaking to new highs, and the momentum shown on the MACD turning up, this looks strong. The volume has been a lot stronger in previous years, but the setup still looks robust. At this point, this is the lowest average volume level in a couple of years. Have a great long weekend and good trading, Greg Schnell Read More 

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Healthcare Stock Pre-Reports Strong Results, Breaks Out

by Tom Bowley

Stryker Corporation (SYK), a medical technology company, preliminarily reported their latest quarterly results and indicated they'd be ahead of expectations.  That announcement resulted in a gap up and breakout above previous price resistance on Wednesday.  Over the past couple days, we've seen a bit of selling that could provide a short-term buying opportunity as both price and gap support have been tested.  Check it out: I'd look for those two support levels to hold, but the rising 20 day EMA can't be ruled out for a test as well.  Given the recent Read More 

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A High and Tight Consolidation for IWM

by Arthur Hill

After a big surge from early November to early December, the Russell 2000 iShares (IWM) moved into a tight trading range the last four weeks. Chartists should watch the resolution of this trading range for the next directional clue. The chart shows Bollinger Bands confirming a volatility contraction as the bands narrowed significantly. We can measure the distance between the bands using the BandWidth indicator, which is shown in the indicator window. Notice that BandWidth dipped to its lowest level since early September.  John Bollinger theorized that Read More 

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Pointing To A BioTech Breakout In XBI?

by Greg Schnell

XBI, IBB, SBIO and numerous other Biotech ETF's have surged the first few days of the new year. They all look set to breakout so you might want to tune your eyes into the area for at least a few interesting charts. I thought the last two times were also going to break free, but the new year, new start might be just enough to get it done this time. The SCTR is already above 90, so there is plenty of momentum as it tests the big trend here. It wouldn't take much to make new one-year highs in Relative Strength (purple) to really push it onto the institutional investors desk. The volume has Read More 

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Copper Hits Key Fibonacci Level after Shallow Pullback

by Arthur Hill

The Copper ETN (JJC) broke out with a big surge in October-November and then pulled back in December. This pullback looks like a normal correction after a big move and chartists should be alert for a continuation higher. The weekly chart shows JJC and the Copper Continuous Futures Contract ($COPPER) basing from November 2015 until October 2016 and then breaking base resistance with a strong move. This breakout move also pushed copper to a 52-week high, but created a short-term overbought condition that needed to be alleviated. Overbought conditions dissipate with a pullback, a flat Read More 

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This S&P 500 Company Is On Verge Of Major Breakout

by Tom Bowley

Since the beginning of 2012, Fastenal Co. (FAST) has tested its 48-49 price resistance zone on seven different occasions - most recently four weeks ago - without any success.  But this multi-year consolidation follows a prior uptrend so I expect that we'll see a breakout sooner rather than later.  Volume was strong on the most recent advance while volume has slowed considerably on the recent selling.  Look to the rising 20 week EMA to hold as support should we see continued selling.  Here's the chart: There's been a lot of back and forth over the past several years Read More 

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Squeeze Play Hits Monsanto at Key Juncture

by Arthur Hill

Monsanto (MON) is in the midst of a tight consolidation and the resolution of this consolidation could trigger a big breakout. Let's first start with the bigger picture. MON surged 36.4% from March to June and then corrected with a large wedge. The low of this wedge marks a 50% retracement of the prior advance. Thus, it looks like the surge represents two steps forward and the wedge represents one step backward. The pattern and the retracement amount are typical for corrections and the stock is now challenging the upper trend line.  The pink area Read More 

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2016 In Review - Equities

by Greg Schnell

This is the final installment of 2016 In Review.  The first three are: 2016 In Review - Commodities 2016 In Review - Currencies 2016 In Review - Bonds There were lots of wide swings in the 2016 market as always. With a plunderous start, January had the equities selling off. To finish the year, the banks roared faster than the 8 years before. Commodity related equities bounced out of a five-year bear market while Oil and Gas equities doubled off the lows to finish the year near their annual highs. Here is the Read More 

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2016 In Review - Bonds

by Greg Schnell

When everybody loves a bond to everyone hates a bond all within 6 months, it makes it hard for average investors to have any confidence in the stability of the market. That emotional roller coaster showed up in the bond market again this year. Interestingly enough, every year is the year that pundits have reached the end of the bond bull market until it makes a lower low in yields and higher prices. So far, the last high we have on the 30-Year bond price is the highest price in this 30 year bond bull market, so it is a little early to call the end of the bond bull market. For Read More 

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2016 In Review - Currencies

by Greg Schnell

Continuing on our review of 2016, we move to currencies. We can look at the $USD using annual bars as the data goes back to 1973. The US Dollar is almost back to where the close was in 1973. The blue line is our current level. 2016 marked a breakout on the $USD above a 2 year consolidation. We can see the RSI on a weekly chart is up around 70. The MACD is at the second highest level in 5 years so that is also somewhat stretched. Zooming in to look at the dollar on a daily chart, the RSI and the MACD suggest that the dollar is losing momentum even Read More 

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QCOM's Rough Week Could Provide Opportunity

by Tom Bowley

Technology stocks (XLK) have shown signs of slowing momentum via lower weekly MACD readings while prices have moved higher.  Component industry groups like semiconductors ($DJUSSC) and software ($DJUSSW) have similar momentum issues and that contributed to industry weakness as technology was one of the worst performing sectors last week.  One large cap technology stock that suffered was Qualcomm (QCOM), which fell 2.48% for the week and has fallen close to 10% since topping in late October.  QCOM's chart, however, is very strong technically and the recent weakness looks Read More