Don't Ignore This Chart

December 2017

Don't Ignore This Chart

AstraZeneca (AZN) Surges! Are All Time Highs Next?

by Greg Schnell

AstraZeneca has not made all time highs for the last three years. However, this current setup looks like it could be the trigger point.  With everything surging and the MACD coiled, a sudden surge here could bring a whole new look to this chart. Happy New Year! Greg Schnell, CMT, MFTA. Read More 

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Regional Bank ETF Winds Up before Next Move

by Arthur Hill

The Regional Bank SPDR (KRE) surged to a 52-week high in late November and then formed a bullish continuation pattern as it consolidated the last few weeks. First and foremost, the long-term trend is up for KRE because of the breakouts in September and November, and the 52-week high in November. The bigger uptrend dictates my trading bias and it is clearly bullish right now. Since the breakout, KRE consolidated with a pennant, which is a continuation pattern. The prior move was up and this makes the pennant a bullish continuation pattern. Note that pennants are short-term patterns that Read More 

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Copper Miners (COPX) Might Start The New Year Hitting 52-Week Highs

by Greg Schnell

Commodity charts are breaking out left and right. Today, the Copper Miners ETF (COPX) tried to break out and make new 52-week highs. This might give a pullback as you can see the ballistic move up to retest the old highs. It should definitely go on a watch list. The Steel ETF (SLX) broke out to new 52-week highs last week. The Aluminum chart also broke out. Gold and Silver also had a good week. Gold and Silver have made significant seasonal lows in December the last few years. All of these metal related stocks are just starting to break out. This looks like a great setup for Read More 

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Diamonds For Christmas? How About Diamond Offshore (DO)

by Greg Schnell

Diamonds are always popular this year. Perhaps its time to think about a relationship with the unloved energy services sector. Diamond Offshore Drilling (DO) has broken above a beautiful head/shoulders base this week. The SCTR has soared above 70, the relative strength has broken to new 9 month highs and the MACD has recently pulled back to reset at the zero line and just started to turn up. I also covered a lot of other Oil Services stocks on the Commodities Countdown with Greg Schnell 2017-12-21. It looks like the Oil Services could kick off the new year with a Read More 

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Schlumberger Ends Downtrend, Now Looks To Confirm Price Breakout

by Tom Bowley

The energy ETF (XLE) has been blistering hot this week and today its three largest holdings - Exxon Mobil (XOM at 23%), Chevron Corp (CVX at 17%) and Schlumberger (SLB at 7%) - all had some form of a breakout.  XOM surged to its highest close since January.  CVX closed at its all-time high.  And finally, SLB broke a serious downtrend and looks to clear overhead price resistance.  Check out SLB's chart: Look for a bit of hesitation as SLB approaches the 69.50 area, but accumulation appears to be taking place as SLB has risen over the past couple months with volume Read More 

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Amgen Goes for a Pennant Break

by Arthur Hill

Amgen (AMGN) is one of these stocks that is leading year-to-date, but lagging over the last three months. Year-to-date, the stock is up around 25% and the S&P 500 SPDR is up around 22%. Over the last three months, the stock is down around 4% and the S&P 500 SPDR is up around 7.5%. It has been a rough quarter for Amgen, but the overall chart looks bullish and the recent correction may be ending. AMGN hit a new high with a big surge in September and then fell all the way back to the August low in November. The stock ultimately held this low and the 50-day EMA remained above the Read More 

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Halliburton (HAL) Heads For Higher Ground

by Greg Schnell

Halliburton has been basing for a few months now. Today, Halliburton climbed out of the valley and started rising higher. With the price action searching for higher ground, the stock is also starting to outperform on the SCTR. This is the first time the SCTR has moved above 50 in 9-months. The Relative Strength to the $SPX is trying to move above a downtrend. The price action is very bullish, as it has broken through resistance and breaking to $46. Volume has been heavy most of December and the MACD is trending up with the two lines separated. A look across other Read More 

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Analog Devices Turns at Key Retracement Zone

by Arthur Hill

There is a certain ebb and flow in an uptrend where the advances consistently outpace the pullbacks. Think of it as two steps forward and one step backward. The chart for Analog Devices (ADI) shows a big move to new highs from August to November and then a 50-62% retracement with the decline back to the 84 area. The move to new highs represents the two steps forward and the retracement represents the one step backward. It looks like the step backward is ending because ADI broke above the 50-day EMA with a two day surge and MACD moved above its signal line.  Read More 

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Teekay LNG Partners (TGP) Imports A New High

by Greg Schnell

Teekay LNG Partners (TGP) Broke out to new two year highs this week. This marked the highest close in two years when the week settled out. The chart has all kinds of bullish technical signals. The RSI has a bull market pattern of staying above 40. The Relative Strength broke out to new multi-month highs.  Price action has been consolidating nicely and this week marks a definitive breakout. Volume expanded by 30% on the breakout and the MACD just gave a bullish cross above zero. Holding above $19.00, this chart looks like a nice breakout. Good trading, Greg Schnell, CMT Read More 

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Did Mylan's Shooting Star Candle Mark A Near-Term Top?

by Tom Bowley

We'll soon find out.  But, as a short-term trader, I'd have sold Mylan (MYL) into the close today.  A close above 40.09 on heavy volume would confirm a breakout.  Today, MYL hit 41.59 intraday, but fell all the way back to close at 40.01 as it failed to hold its breakout into the close.  Given that nearly 20 million shares changed hands - one of the heaviest volume days of 2017 - that false breakout, reversal and long tail to the upside is quite ominous.  The rising 20 day EMA looks like a short-term target to the downside: It certainly had the prerequisite Read More 

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What a Difference a Month Makes for Sector Performance

by Arthur Hill

The two sector Performance charts below show a rather dramatic shift in market leadership over the last two months. First, note that these PerfCharts are using the nine equal-weight sector ETFs. In contrast to the cap-weighted sector SPDRs, these equal-weight ETFs provide us with a performance picture for the "average" stock in the sector. The top PerfChart shows performance from October 12th to November 10th. Notice that technology (magenta) and energy (teal) are the clear leaders with the biggest gains (black arrows). In contrast, the consumer discretionary and finance sectors were down Read More 

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Freeport McMoRan (FCX) Solders A New 9-Month High

by Greg Schnell

Freeport McMoRan (FCX) hit new 9-month closing highs today. As a miner of Copper and Gold, the strong price action in the face of weakness in the underlying metals is a very bullish trait. When the stock is outperforming the base metal, that can be a very good signal. The last panel shows a breakout on FCX compared to Copper. The second last panel shows FCX compared to Gold. The last two big thrusts in the stock have broken relative performance trend lines. The SCTR is moving above 75 which suggests strong price action. The relative strength in purple to Read More 

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Ingersoll-Rand Surges off Support

by Arthur Hill

Ingersoll-Rand (IR) is showing renewed signs of life with a surge off support and two mini breakouts. Note that IR is part of the industrials sector and this sector is showing upside leadership with a 52-week high recently. First and foremost, Ingersoll-Rand is in a long-term uptrend with a 52-week high in October and a positive PPO(50,200,0). Note that the PPO(50,200,0) is positive when the 50-day EMA is above the 200-day EMA.  The stock fell quite hard from late October to mid November, but managed to find support near the August low and firmed into Read More 

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Intel Testing Key Short-Term Support

by Tom Bowley

On October 26th, Intel (INTC) posted quarterly earnings results and beat both revenue and EPS estimates.  It resulted in a very strong gap higher the next morning and then INTC continued rising, tacking on another 10% within a week.  But INTC became very overbought with an RSI above 90 and needed a pullback.  Since topping in early November, INTC has lost close to 10% and is now testing the top of gap support and its rising 50 day SMA: The RSI has fallen back into the 40s (black arrow) and that's typically a level where we see prices turn higher again in an uptrend Read More 

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The View Gets Clearer for Valeant (VRX)

by Greg Schnell

The view for Valeant (VRX) improved substantially this week as the stock broke out of a well-defined base. From a  technical analysis perspective, this is a text book breakout. The stock has based by building a one year range. The new 52-week high broke out of the base this week. The view is a little clearer now for the owner of Bausch and Lomb eye care products.  The SCTR has surged to 99. The moving averages are in the proper alignment with the 10-week moving average above the 40-week. The volume surged on the breakout which is what we want to Read More 

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Here's A Pharma Printing A Hammer After Filling Gap

by Tom Bowley

I'm constantly looking for short-term trading opportunities and Perrigo (PRGO) fits the bill.  After reporting better-than-expected results in its latest quarter, PRGO gapped up strongly and today filled its gap before finishing on a solid note to print a hammer (blue circle below) - many times a signal of a bottom after a downtrend.  Reported revenues of $1.23 billion easily exceeded expectations of $1.17 billion.  In addition, EPS of $1.39 blasted past the $1.10 consensus estimate.  Now the issue is whether PRGO can overcome a very weak Read More 

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United Technologies Forms Classic Continuation Pattern

by Arthur Hill

United Technologies (UTX) looks ripe for a breakout to new highs as a bullish cup-with-handle pattern takes shape. Note that UTX is in the industrials sector and the defense-aerospace industry group. The Industrials SPDR (XLI) and the iShares Aerospace & Defense ETF (ITA) both hit new highs on December 1st. The chart shows UTX in a long-term uptrend because it hit a new high in July and the 50-day EMA is above the 200-day EMA. It looked like the stock was breaking down with the gap-plunge in early September, but this turned into a high-volume selling climax. The September low marks the Read More 

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Clorox (CLX) Makes Fresh New Highs

by Greg Schnell

Clorox broke out on Monday to news highs and continued the move today. With the rotation from growth to value or growth to defensive, this would fit right in. The SCTR is pushing into the top quartile, which I particularly like. The relative strength is improving, the news highs are bullish, the volume accelerated on the breakout and the MACD is pointing higher. All that to say the stock looks set up for a big move here. As long as it holds above $140, it looks like a nice breakout is in order. Good trading, Greg Schnell Read More 

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Mylan Continues its Move with Expanding Volume

by Arthur Hill

Mylan (MYL) was hit hard in early August with a plunge to 30, but firmed and recovered with a gap and surge to the upper 30s. The stock consolidated after this gap-surge and recently broke out with above average volume. Notice that the gap-zone held in the mid 30s as the stock consolidated in the 35-39 area. A consolidation after a sharp advance represents a rest that is needed to digest gains and alleviate overbought conditions. The consolidation did its job for eight weeks and ended with Friday's breakout. In addition to the breakout, note that upside volume outpaced downside volume over Read More 

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Shake Shack Starts Shaking (SHAK)

by Greg Schnell

Shake Shack (SHAK) started shaking this week. The stock made new 16 month highs today. This surge above a well defined base is very bullish. The SCTR is pushing back up above 70. The 10 week moving average has moved above the 40 week moving average. The price has broken above significant resistance, going back to August of 2016. The MACD is going positive and is at the highest level since the first few months of trading. This is a great base. This base is very similar to Facebook (FB) in 2012 and Alibaba (BABA) in 2016. The ultimate move might not be the same Read More