Don't Ignore This Chart

September 2017

Don't Ignore This Chart

Two Bullish Charts In A Very Bullish Industry

by Tom Bowley

Delivery services ($DJUSAF) broke out of a bullish continuation cup with handle pattern a few weeks ago and appears poised for a further fourth quarter rally, albeit with some profit taking along the way.  Bullish continuation patterns require a prior uptrend and the DJUSAF certainly had that.  Check out the chart: Personally, I love to see the handle form back to the rising 20 period EMA, which is exactly what the DJUSAF did here.  Now that it's broken out, I expect to see bullish action in companies within this industry group.  Two companies that recently posted Read More 

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Bonds And Financials - Setting Up A Fourth Quarter Showdown

by Greg Schnell

Bonds and Financials are correlated tightly. We all know that. But the trade appears to be getting set up for a fabulous fourth quarter again. This chart inverts the TLT 20 Year Bond ETF on the top panel so that it behaves the same as the financials. Notice the breakout in the 4th quarter of 2016 when all three charts broke above trend lines. The stage appears to be setting up again. With the inverted breakout (Breakdown in reality) on the TLT on Wednesday, this looks like it is setting up for another bullish trade into the financials in the fourth Read More 

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Watch these Yield Spreads for Clues on the Greenback

by Arthur Hill

The US Dollar ETF (UUP) is made of five currency pairings. The Dollar/Euro ($USDEUR) pair accounts for 57.6%, Dollar/Yen ($USDJPY) weighs 13.6%, Dollar/Pound ($USDGBP) is 11.9%, Dollar/Canadian ($USDCD) is 9.1% and Dollar/Swiss ($USDCHF) is 3.6%. Clearly, the Dollar/Euro relationship is the big driver here and Dollar/Yen is a distant second. Chartists interested in the twists and turns of the greenback should also keep an eye on the yield spreads. The chart below shows UUP with the 10-year yield spreads for the US and Germany, and the US and Japan. Notice that there is a strong positive Read More 

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Is Expedia (EXPE) The Way To Pay For Your Next Holiday?

by Greg Schnell

The Expedia (EXPE) chart demonstrates a lot of technical setups here. If the setup works, this could pay for your next holiday! Let's walk through them. First of all, the SCTR is a little weaker than I would like and needs to hold 50. The early half of 2016 has an SCTR below 50. When the rest of the stocks were rallying, Expedia was a little slow to take off. The crossover of the Full Stochastics back above 20 sets up a nice bounce location. Historically, this looks like a good signal. The price action is finding support at horizontal support and trend line support. The confluence of Read More 

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Costco Forms Bullish Pennant Near Breakout

by Arthur Hill

Costco (COST) fell on hard times this summer with a plunge from the low 180s to the 150 area. Despite this gap and sharp decline, the stock firmed in July-August and surged above the red resistance zone in September. Notice that the stock found support in the 150 area with two bounces and this could be considered a double bottom (green zone). The intermittent highs mark a resistance zone in the 161-162 area and the stock broke this zone in mid September. Technically, there is a higher high and a double bottom breakout is in the making.  COST was a bit overbought Read More 

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Tesla Weakens But Chart Is On Cruise Control

by Tom Bowley

Tesla (TSLA) remains a crowd favorite as the stock's 2017 advance has been accompanied by extremely heavy volume.  I see major accumulation when I look at TSLA's chart.  But like every other stock, momentum can become an issue from time to time and TSLA appears to be battling momentum issues.  Here's the latest weekly chart after TSLA dropped 7.56% last week: Back in June, TSLA's weekly RSI moved above 80 and that's, quite frankly, an unsustainable level.  Consolidation began at that point and I expect to see one of two things moving forward.  Either TSLA Read More 

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Is Apple (AAPL) About To Take A Bite Of Your Portfolio?

by Greg Schnell

Apple (APPL) long loved and always watched for exciting products came out with a new suite of products last week. With their ability to garner a lot of free advertising in the media discussing the new products, Apple usually generates a tidal wave of sales.  While that might be true, the shareholders are starting to tell us a different story. We have seen investors fail to follow through before and it usually led to healthy downside corrections. This week looks more important than most for the Apple shareholders. Looking at the SCTR line, when Apple has remained above 75 Read More 

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Let Interest Rates Soar If You're Long Equities!

by Tom Bowley

Fed Chair Janet Yellen suggested there'd be another interest rate hike in 2017 and the Fed's overall tone was a bit more hawkish than was anticipated by Wall Street.  That resulted in a big spike in the 10 year treasury yield at 2pm EST yesterday, the time of the Fed announcement.  There's a common denominator between the Dow Jones and the 10 year treasury yield ($TNX).  They've both been on fire of late.  The Dow Jones rose for the ninth consecutive session.  The TNX has done the same.  While the TNX has fallen consistently since the early 1980s while equity Read More 

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Broadcom Consolidates within Uptrend $AVGO

by Arthur Hill

This is my third straight DITC posting with a semiconductor stock. The first featured Texas Instruments forming a cup-with-handle pattern and the second featured Intel with a surge towards long-term resistance. Today's chart focuses on Broadcom, which is actually lagging the S&P 500 SPDR over the last few weeks. Note that SPY hit a new high this week and AVGO remains within a consolidation. The long-term trend is clearly up and a consolidation within an uptrend is typically a bullish continuation pattern. This means an upside breakout at 255 would signal a continuation of the bigger Read More 

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BP (BP) Breaks Out To New Two Year Highs

by Greg Schnell

British Petroleum (BP) has been wobbling higher while oil has had a series of lower highs over the course of 2017. This week, BP has pushed to new two year highs. With an astounding dividend yield of 6% and superb price action on the stock, this chart looks great. The MACD is breaking out above a trend line and volume has slowed while the ascending triangle builds.  Check out a host of new videos posted this past week on the StockCharts.com Vimeo channel.  Check out the new mini charts when you hover over a stock ticker symbol on the Read More 

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Intel Goes for a Big Breakout $INTC

by Arthur Hill

Some sixty stocks in the S&P 500 were up 5% or more last week, and Intel was one of them. Intel's importance seems to have diminished over the years, but it is still an industry gorilla that accounts for around 11% of the Semiconductor ETF (SMH) and 8% of the Semiconductor iShares (SOXX). The chart shows Intel breaking out to new highs and leading the market for a few months in 2016. The stock then moved into a long consolidation and traded flat the last 12 months. On the bullish side, notice that the breakout zone turned into a support zone and Intel consolidated above the breakout Read More 

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Willis Towers Watson (WLTW) Pushes Higher

by Greg Schnell

Willis Towers Watson (WLTW) Risk Management company is breaking out to new highs this week. In the face of Hurricanes Harvey and Irma, the stock is surging. It surged above a three month consolidation last week and today it continues to move higher. With the MACD turning up while above zero, this looks ready to continue the push to higher ground. The overall chart has been in a pretty good uptrend for a while now. The Relative Strength shown in purple recent touched 3-year highs.  I posted a new Commodities Countdown Video this week Read More 

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After Long Basing Period, Pharmas Look To Break Out

by Tom Bowley

Sometimes the best moves higher occur after an extended period of sideways price action, or basing.  We recently saw a breakout in biotechs ($DJUSBT) and that industry quickly became one of the strongest.  The healthcare sector (XLV) also has been among the strongest sectors.  It makes sense that other healthcare industry groups will likely break out to support the overall sector.  Enter pharmaceuticals ($DJUSPR): In my August 31st DITC blog article, I featured the autos & parts index ($DJUSAP) as it made a major breakout after an extended consolidation period Read More 

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Texas Instruments Traces out Bullish Continuation Pattern $TXN

by Arthur Hill

Texas Instruments (TXN), the semiconductor behemoth, formed a bullish cup-with-handle pattern and a classic volume-based indicator points to a breakout. The chart shows TXN hitting resistance in the 83-84 area from June to September (red zone). In between these resistance points, the stock dipped to the 76 area in June and then the 80 area in August. The June dip forms the bowl, while the August consolidation forms the handle (blue lines). A break above rim resistance would signal a continuation of the long-term uptrend and forge new highs.    Read More 

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Textron (TXT) Busts Through 2017 Resistance

by Greg Schnell

Textron has had a tumultuous last couple of years. The stock has been rallying out of a deep base. It has spent 2017 consolidating, but this week the stock accelerated to new highs. The SCTR is surging up to 75. The momentum on the MACD is just turning up with lots of space above. This chart looks ready to accelerate with a stop at this weeks low. There have been lots of videos posted in the last week. You can check out the Market Outlook with Tom Bowley and Greg Schnell on the StockCharts.com Vimeo channel or click to play here. Read More 

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Volatility Contracts as J&J Consolidates

by Arthur Hill

Johnson & Johnson (JNJ) appears to be ending its consolidation period with a surge and triangle breakout over the last three days. Overall, the stock is in a long-term uptrend because it hit a 52-week high in June and remains well above the rising 200-day moving average. JNJ consolidated after hitting this high by forming a triangle over the last few months. Notice that Bandwidth dipped to its lowest level since January as volatility contracted into late August. This is typical for a consolidation and it looks like volatility is turning back up as the stock breaks out.  Read More 

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Petrobras (PBR) Takes Out The 40 Week Moving Average

by Greg Schnell

With everyone jumping on the emerging market trade, Brazil has recently shot up to new 9-year highs on the local market chart. Petrobras (PBR), one of the biggest energy companies operating in Brazil is making a moving now too. It is taking out the 40 Week Moving Average. With a surging SCTR and the support of the 40 week MA under the stock, this looks like a nice way to participate in the emerging markets. The Market Outlook with Tom Bowley and Greg Schnell will be on Saturday September 9th, 2017 @ 11:00 AM EDT. Click here to register. Read More 

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Gambling Index Prints Reversing Shooting Star Candle

by Tom Bowley

Over the past six months, the Dow Jones U.S. Gambling Index ($DJUSCA) has gained 27.35% to lead all consumer discretionary groups.  In fact, renewable energy ($DWCREE) is the only industry group among all sectors to outperform gambling stocks.  But the short-term outlook for gamble stocks changed on Thursday with a potential reversing candle printing.  Take a look: Momentum has been very strong so I'm not looking for a significant long-term top.  However, any time a stock or index makes a new high intraday on increasing volume, and fails to hold it into the close, I'd Read More 

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Lowes Holds Support and Forms Potential Reversal Pattern

by Arthur Hill

Lowes (LOW) successfully tested the 71 area twice in July-August and surged above short-term resistance this week. At the risk of jumping the pattern, the two semi circles show a double bottom taking shape and a break above the August high would confirm this bullish reversal pattern. Also notice that the stock gapped down on August 23rd and dipped below 71 during the day (red oval). The stock recovered that day and subsequently closed above 73. More importantly, the stock continued its recovery with a move above the gap high and a break above short-term resistance at 76.  Read More 

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Cabot Oil And Gas (COG) Shifts A Gear Higher

by Greg Schnell

Cabot Oil and Gas (COG) is not just another cog in the oil-patch wheel. This peppy producer just broke out to two year highs, contrary to all the naysayers who keep looking back at the performance charts for energy. It has been making higher highs and higher lows since last October and this thrust above resistance couldn't be more welcome in an industry full of bearish charts. The SCTR surged above the 75 level to 92 and looks like its just getting its head of steam. Good trading, Greg Schnell, CMT, MFTA Read More 

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Diamondback Energy (FANG) Coils

by Greg Schnell

Energy is the most beaten down sector. The SCTR is hanging out at 3.8 and 75 is a good score. It couldn't get uglier? Who knows, but there are a ton of positive divergences setting up on the energy related charts right now. Diamondback Energy (FANG) is coiling for a move here and it looks tempting for bottom fishers. If you are a breakout buyer, this won't be your chart. First of all, price is trying to hold above a long-term support resistance level. Price has to hold $85 so the risk is tightly defined. I am watching closely for the Full Stochastics to turn up from a higher low Read More