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Volume Confirms Breakout For WellCare Group

by Tom Bowley

WellCare Group (WCG) posted quarterly earnings that beat Wall Street consensus estimates and the stock soared above recent price resistance.  Volume surged as traders accumulated the healthcare provider.  The Dow Jones U.S. Health Care Providers Index ($DJUSHP) broke out recently and WCG has performed exceptionally well on a relative basis: WCG broke its down channel a couple of weeks ago and has seen its SCTR (StockCharts Technical Rank) rising ever since.  Tuesday's breakout was accompanied by the heaviest volume of 2017, suggesting that WCG is under accumulation.  Read More 

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BroadCom Gets a Squeeze and Makes a Move $BRCM

by Arthur Hill

BroadCom looks set to continue its long-term uptrend with a breakout and fresh 52-week high. The chart shows BroadCom (AVGO) with Bollinger Bands, the Bandwidth indicator and the Percentage Price Oscillator (PPO). First, notice that the stock hit a 52-week high in July and the PPO(50,200,0) has been above zero all year, which means the 50-day EMA is above the 200-day EMA. The long-term trend is clearly up and this means our trading bias should be bullish. In other words, we should expect bullish resolutions to short-term setups.   The pink area Read More 

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When A Hammer Meets Gap Support

by Tom Bowley

I'm a big fan of candlesticks, particularly reversing candlesticks as they many times signal that a short-term downtrend has ended in an overall uptrending stock.  One of my favorite trading strategies is to trade strong stocks off gap support.  So what happens when both strategies meet?  Well, JD.com (JD) has both right now so its trading behavior over the next two weeks will be quite interesting as that's when it reports its next quarterly results.  Here's the current technical outlook: JD is well off its August high.  The stock had trended higher Read More 

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The Divergence is Just Icing on the Cake for T-Mobile $TMUS

by Arthur Hill

T-Mobile is showing signs of life with an upturn off support and a positive divergence in RSI. As always, lets review the bigger picture before trying to make sense of current conditions. TMUS basically doubled from February 2016 to April 2017 with a 108% advance. This massive advance gave way to a pullback into July and the stock found support near 60. The 50-day EMA is above the 200-day EMA and the stock has been battling the 200-day EMA the last two months. Given the evidence, I would assume that the long-term trend is up.  Signs of life are Read More 

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Gold Miners Lose Price Support On Heavy Volume

by Tom Bowley

The Dow Jones U.S. Gold Mining Index ($DJUSPM) held price support on its late-September swoon, but that was not the case with the recent selling.  The reason?  It's probably the reverse head & shoulders breakout on the U.S. Dollar (UUP).  A rising dollar normally sends gold prices (and gold miners) lower.  Check out these recent technical developments: I'd be very careful with gold ($GOLD) and gold mining stocks unless, or until, neckline support on UUP is lost in the 24.40-24.50 area.  This reverse head & shoulders pattern is a bottoming formation Read More 

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A Healthy Reaction to Earnings Reinforces Support in LH

by Arthur Hill

Laboratory Corporation of America (LH) reported earnings today and surged above the 50-day moving average on the results. The trend since late July remains down, but recent price action is constructive and a breakout could be in the offing. The stock surged around 20% and hit a 52-week high in July. The 50-day moving average is above the 200-day and price is above the rising 200-day. Thus, the evidence supports a long-term uptrend. This indicates that the decline from July to October was a correction within a bigger uptrend. Notice how the stock retraced around 61.8% and formed a falling Read More 

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Biotechs Weak This Morning But Look To Be Reversing At Key Support

by Tom Bowley

The Dow Jones U.S. Biotechnology Index ($DJUSBK) broke out of serious longer-term consolidation when it cleared 1800 price resistance in mid-June.  Since then, we've seen a nice uptrend, characterized by rapid advances and steady pullbacks.  The group lost nearly 120 points from Friday's intraday high to today's intraday low, however, but is attempting to print a reversing hammer on its 50 day SMA support.  Check it out: I didn't annotate it on this chart, but the DJUSBT struggled recently (and back in July/August) after a negative divergence printed (higher price highs Read More 

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US Bancorp Breaks out of Long Consolidation

by Arthur Hill

US Bancorp (USB) ended a long corrective period with an upside breakout and this breakout is holding. Note that USB is part of the Financials SPDR (XLF) and the Regional Bank SPDR (KRE). These two are up double digits over the last six weeks and this puts has sector and the industry group strength behind the stock. On the price chart, USB advanced some 50% from June 2016 to February 2017 and then embarked on a long consolidation period. Even though this consolidation seemed to overstay its welcome, it was perhaps necessary to digest the big gains. Also keep in mind that a consolidation Read More 

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This Popular NASDAQ 100 Stock Has A Horrendous Track Record Through December

by Tom Bowley

Let me start by stating that the NASDAQ 100 has earned 61.9% of its gains over the past 20 years during the fourth quarter.  Yep, October through December has accounted for nearly two thirds of the gains on the NASDAQ 100.  So you would think that most of its component stocks would also perform quite well during that time frame.and they do.  There is one very notable exception, however, so (hint) you may want to "name your own price" and wait for entry. Figured out which stock it is?  Ok, it's priceline.com (PCLN).  Since 1998, PCLN has earned just Read More 

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Using RRG to pick Ford from "most active" table

by Julius de Kempenaer

In the top-right corner of the homepage at StockCharts.com, there is a table that holds "Market Movers". It defaults to the top10 "most active" in the S&P 500 but you can change that using the buttons and drop-downs. Below the table, you will find links to view the stocks in this table in CandleGlance or RRG format. Clearly, I am interested in the latter ;) After the close of Thursday 10/19 (what a date right?) the Relative Rotation Graph for the ten most active stocks in the S&P 500 index looks as plotted above. There Read More 

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Applied Optoelectronics Lengthens Downtrend, Approaches Next Major Support

by Tom Bowley

Applied Optoelectronics (AAOI) was one of the darlings of Wall Street in 2017..until early August.  Since that time, AAOI has declined nearly 60% in less than three months and has shown no signs of a reversal.  The most recent drop a little over a week ago was as a result of lowered revenue and EPS guidance and that jump started AAOI's move towards its next key support near 40.  Take a look at the chart: Gap support from 37-40 needs to hold or AAOI will likely continue its downward spiral to the top of the previous gap near 27.  Volume trends are negative and note Read More 

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Three Pullbacks for Three Healthcare Stocks

by Arthur Hill

Chartists should watch Gilead (GILD), Amgen (AMGN) and Merck ($MRK) because all three are forming bullish continuation patterns. First and foremost, all three hit new highs in September so it is safe to assume that the long-term trends are up. AMGN and MRK have been trending higher the last 12 months, while GILD broke out in June to reverse its downtrend.  If we assume that the long-term trends are up, then we can also assume that the current pullbacks are corrections within this uptrend. One never knows how far a correction will extend, but three bullish continuation patterns are Read More 

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Here's A Medical Equipment Company With A Near Perfect Seasonal Track Record In October And November

by Tom Bowley

Over the past twenty years, Mettler Toledo Intl (MTD) has averaged gaining 23% per year, but that's not the most impressive performance stat for the company.  During the months of October and November, MTD has risen 85% and 95% of the time, gaining an average of 3.3% and 9.1%, respectively, during each of these calendar months.  Those aren't annualized returns, they're average returns for each month over the past two decades!  Check out the seasonality chart below: The bullish performance during October and November really stands out for MTD, so it's no surprise that Read More 

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Bank of America Holds above Breakout Zone $BAC

by Arthur Hill

Bank of America (BAC) broke out of a large bullish continuation pattern three weeks' ago and this breakout is holding. Overall, BAC surged from June 2016 to February 2017 and then consolidated with a large triangle pattern. A consolidation within an uptrend is a bullish continuation pattern and the breakout around 25 signaled a continuation of this uptrend. The breakout zone around 25 turns into the first support level to watch. A close back below 25 would throw cold water on the breakout and warrant a re-evaluation. I would not, however, turn completely bearish because this would not be Read More 

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Will Seasonal Tailwinds Stem The Tide Of Selling In This Technology Company?

by Tom Bowley

Juniper Networks (JNPR) was under heavy selling pressure last week to open October, a seasonally bullish month for JNPR as the stock has averaged gaining more than 13% each October over the past two decades.  The irony here is that we've seen JNPR twice in recent years open October in the same bearish manner (black circles below) only to bounce off trendline support.  Check this out: While JNPR has been able to maintain an uptrend over the past five years, it's fairly remarkable considering that its industry group - Dow Jones U.S. Telecommunications Equipment Index Read More 

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Citrix Ends Correction with Five Week Surge

by Arthur Hill

Citrix (CTXS), which is part of the Internet ETF (FDN) and Software iShares (IGV), appears to have ended its correction and resumed its long-term uptrend. The stock hit a 52-week high in early 2017 and then declined from May to August. CTXS underperformed the market and its peers during this timeframe, but the decline was a correction within a bigger uptrend. Notice that the move retraced around 61.8% of the prior advance and formed a falling channel. The retracement amount and pattern are typical for corrections. CTXS broke out of the channel with pretty convincing a five week advance Read More 

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Bullish Momentum Building Again On AMD

by Tom Bowley

Advanced Micro Devices (AMD) spent over a year with its SCTR among the highest of all individual stocks.  It was an impressive rally for sure as its stock price rose from below $2 to above $15 in 13 months.  But even the hottest stocks need to evenually consolidate to unwind perpetually overbought conditions.  AMD has been doing that, frustrating thousands of traders.  I don't believe this bullish story is over yet.  In fact, I view the consolidation as a very bullish ascending triangle pattern with volume picking up today to perhaps close at a 2 1/2 month high by Read More 

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Comcast Fails at a Key Moving Average

by Arthur Hill

A recent double top and failure at the 200-day SMA point to lower prices for Comcast (CMCSA). The double top formed from May to early September with two highs around 42 and a low around 38. Comcast broke this low with a sharp decline and then became oversold. The stock bounced back to the break zone and the 200-day SMA in in the second half of September, but turned lower the last four days and this solidifies the double top break. Also notice that a rising flag formed and the stock broke the flag line this week. The indicator window shows the PPO (5,30,5) turning down and breaking its Read More 

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Is Now The Time To Jump In F5 Networks?

by Tom Bowley

F5 Networks (FFIV) has a seasonal history of performing extremely well in October and November, but technically the stock has been a wreck since topping in March 2017 and the early October returns haven't been very good either.  There is hope, however, in the form of upcoming price support and it appears as though longer-term weekly momentum could be turning as well.  Check out this weekly chart: While price support and an improving MACD might suggest a potential reversal is approaching, those red arrows don't lie.  Since March, each time that FFIV has risen to test its Read More 

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Lithium ETF (LIT) Looks Bearish

by Carl Swenlin

This morning I saw a commercial for the Global X Lithium ETF (LIT), and I thought, "Hmmm, lithium . . . batteries for iPhones, MacBooks, etc." So I pulled up a chart of LIT, and all kinds of things jumped out at me. First I saw the parabolic advance that got so steep it collapsed. Next there is the snapback rally that had price back to the previous high, at which point it backed off to form a double top. The PMO formed a negative divergence, which compares equal price tops to a lower PMO top. The OBV has formed a reverse divergence, which Read More 

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One of the Weakest Stocks in the S&P 500 Looks Set to Get Even Weaker

by Arthur Hill

The S&P 500 is near all time highs and we are in a bull market, but Advance Auto Parts (AAP) did not get the memo and recent signals point to new lows. First and foremost, the long-term trend is down because the 50-day SMA is below the 200-day SMA and the stock hit a new low in August. AAP bounced from this August low, but hit resistance near broken support and the falling 50-day SMA. Notice that a rising wedge formed and the stock broke the wedge line with a sharp decline the last four days. This break signals a continuation of the long-term downtrend and a move below the August low Read More 

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This Tech Company Just Broke Out Of Bullish Pattern With Rising SCTR

by Tom Bowley

While we've seen many indices, ETFs and individual stocks break out over the past several weeks, there are still many that are consolidating in bullish fashion and those, upon breakout, provide solid trading opportunities.  Enter DXC Technology Company (DXC).  Over the past two months, the S&P 500 has risen nearly 100 points (roughly 4%) while DXC has quietly consolidated and worked off short-term overbought conditions.  It's how the market works.  Leaders lead, consolidate, then lead again.  DXC's two month consolidation appears to have ended rather Read More 

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RRG says you need to keep an eye on Small Caps!

by Julius de Kempenaer

The Relative Rotation Graph above shows the rotation of the three size indices that make up the S&P Composite 1500 index. Although the S&P 500 large cap index ($SPX) is still clearly on the right-hand side of the RRG, making very small rotations close to the 100-level on the JdK RS-Momentum scale some interesting moves seem to be playing out on the left-hand side of the plot. Large caps took over from small- and mid-caps in April and the preference has been for $SPX since and for the moment still is. But the Relative Rotation Graph of Read More 

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BlackBerry: Will This Rally Be Any Different Than The Last Several?

by Tom Bowley

Blackberry's (BBRY) demise from 2008 through 2012 has been well documented and I'm not really interested in dwelling in that past.  More recently, however, BBRY has attempted on multiple occasions to clear price resistance in the 11-12 range.  Clearing such resistance would be technically significant and further the case for buying BBRY.  Here's the current technical view: The blue circles above show that interest has definitely picked up in BBRY with volume the past six months much higher than at any point in 2016.  Also, the SCTR returning to the 90s is a very good Read More 

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Alphabet Turns up with Increase in Volume

by Arthur Hill

Alphabet, which some of you may know as Google, surged off a support zone with good volume and broke short-term resistance. This breakout could evolve into more because the big picture is also bullish. GOOGL advanced to a new high in May and then consolidated with a long consolidation. The blue trend lines converge slightly so we could call it a symmetrical triangle. Regardless, a consolidation after a 52-week high is typically a bullish continuation pattern and a breakout at 1000 would signal a continuation of the bigger uptrend. Short-term, the breakout in the 950-960 area is holding as Read More 

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Airlines Begin Their Typical October Rally

by Tom Bowley

Airlines ($DJUSAR) absolutely "took off" in today's action as buyers emerged to drive nearly every airline higher.  Spirit Airlines (SAVE) surged 7.10%.  JetBlue Airways (JBLU) popped 7.08%.  Delta Air Lines (DAL) jumped 6.62%.  One fundamental reason for the group's strength was DAL's announcement that it reaffirmed its third quarter unit revenue and margin guidance, excluding the costs associated with Hurricane Irma.  Perhaps more important, however, is the simple fact that it's October.  While many are fearful this time each year because of famed Read More 

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3M Holds the Breakout Zone $MMM

by Arthur Hill

3M (MMM) is helping itself and the Dow Industrials with a breakout in mid September. As a price-weighted average, the stocks with the highest price carry the most weight and MMM, which is the third highest-priced stock, accounts for around 6.5% of the Dow. On the price chart, the stock broke out of a triangle consolidation with a sharp advance in mid September and then fell back over the last two weeks. Prices are holding above the breakout zone (gray area) and this means the breakout remains bullish. Short-term, a small falling wedge formed and MMM is on the verge of breaking the upper Read More