Ross Stores (ROST) recently bounced off its rising 200-day SMA with a bullish candlestick pattern and short-term RSI broke to its highest level of the month. It looks like the short-term pullback is ending and the bigger uptrend is resuming.
ROST plunged in November-December with a sharp decline below the 200-day SMA. This plunged caused the 200-day to flatten in December, but it never really turned down. ROST quickly rebounded in January with a move back above the 200-day and the 200-day is back on the rise.
Short-term, the stock edged lower from late April to mid May with a decline back to the 200-day. A harami formed in mid May and there were also two inside days. These signaled indecision after a sharp decline as the stock suddenly firmed. ROST then gapped up and bounced the last three days. Last week's lows and the rising 200-day mark the first support level to watch for a failure.
The indicator window shows 5-day RSI for a short-term momentum perspective. RSI dipped below 30 twice in May and then broke above its prior highs last week. This represents a momentum breakout of sorts.
On Trend on Youtube (Thursday, 16-May)
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Arthur Hill, CMT
Senior Technical Analyst, StockCharts.com
Author, Define the Trend and Trade the Trend
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