Don't Ignore This Chart

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

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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 is expected. The indicator window shows MACD confirming with a bearish signal cross over the last few days. 

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Thanks for tuning in and have a good day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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