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Can This Flame Light Up Your Portfolio?

by Greg Schnell

The frustration of watching the market trade sideways for a year goes on. After the Fed meeting and Options Expiration, the market has wandered sideways yet again; from Tuesday's close to the following Thursday close, the market is up 0.25%. I am currently looking for setups near support and oversold conditions that could bounce while keeping a tentative eye on the new highs list. One of the charts that pops up is the Natural Gas chart. The reason this chart is interesting is that the price is near 10-year lows. Looking in on the zoom panel, a few reversal bars are showing up Read More 

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This Sector Just Returned to the Leading RRG-Quadrant AND Shows an Outperformance 71% of the Time in July

by Julius de Kempenaer

I do not believe that there is just one single tool, strategy, method, etc. that fits all our needs as investors or traders. For me, the power of research and analysis lies in combining information from various sources and subsequently putting all that together into a market-view, strategy, system, etc. That is why I always encourage people to NOT use RRG as a standalone tool, but to always combine it with information from other sources and embedding their use into an investment process. Today I was looking at seasonality charts that Read More 

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Here's a Food Stock with Performance Written All Over It

by Arthur Hill

The Consumer Staples SPDR (XLP) is the third best performing sector over the last three months and one of only three sector SPDRs to record a new high here in June (along with XLU and XLRE). In addition, the S&P 500 is trading comfortably above its 200-day SMA. Overall, we can assume that the S&P 500 is in bull mode and consumer staples is a leading sector. Looking within the sector, I came across Performance Food Group (PFGC) in my trend-momentum scan. The stock is in a long-term uptrend and consolidating with a bullish triangle taking shape. Read More 

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Is This Dow Stock Laced Up For A Fall?

by Greg Schnell

Everyday, the market presents new investing ideas. Sometimes it's a common brand resurgence, other times it's a macro thesis driving industry groups higher. This week, I noticed that the chart of Nike is not behaving nearly as well as Brooks Koepka, one of their celebrity brand ambassadors. Let's take a look at the indicators. First of all, the SCTR shows Nike behaving in the bottom 40% of the stocks out there. While this is a weakness, it also shows that Nike is underperforming large-cap peers. The purple area chart, showing the relative strength to the $SPX, has Read More 

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Pfizer Hits a Milestone for 2019

by Arthur Hill

The S&P 500 hit a new high last week and the Health Care SPDR (XLV) broke out of a large symmetrical triangle with a big surge in June. The stock market is in bull mode and healthcare is coming alive. XLV was the worst performing sector from January to May (+1.27%), but turned around in June and is one of the top performing sectors (+7.85%). Also note that healthcare is the third largest sector (14.3%) in the S&P 500. Thus, strength in healthcare contributes to strength in the S&P 500. On the price chart, PFE broke out of a large falling wedge with a big Read More 

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The Dollar Beats All Currencies In The G10 Except For The Japanese Yen

by Julius de Kempenaer

Relative Rotation Graphs can be used to visualize the relative movement of much more than just stocks and sectors. In the example below, the RRG shows the relative rotation for the G10 currency universe using USD as the base currency. In this case, you will see nine currencies, all expressed in USD terms, rotating around the USD. Because currency pairs in and of themselves are already relative strength lines, we need to set the "Benchmark" for this RRG to $ONE. Looking at the chart Read More 

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GE Takes the Lead with a 3-month High

by Arthur Hill

I featured GE in mid-May as it attempted to break out of a falling wedge (DITC on May 15th). The breakout failed as the stock fell back in May, but a higher low formed and a triangle evolved. Overall, some sort of bullish consolidation formed from February to June and the stock is attempting another breakout. The chart shows GE with the failed wedge marked in gray and the current triangle marked in blue. Notice that the stock held support in the 9 area with bounces in March, April and late May. This is positive because it reflects a basing process with a clear support zone to watch going Read More 

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WYNN Turns To Winning

by Greg Schnell

Wynn Resorts (WYNN) is a gambling stock with nice trending runs in both directions. In a favorable scenario, owning this stock could allow you to make some significant gains in a short period of time. However, due to the stock's volatility, it will need to be traded as soon as it rolls over in order to capture any gains. The first signal we're seeing for an entry into the stock is a full stochastic signal. This move above 20 is starting to accelerate higher. Looking left on the full stochastic indicator, we can see that the full stochastic is firing off a lot of false signals down Read More 

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Illumina Rises above the Biotech Crowd

by Arthur Hill

It has been a rough three months for many biotechs and the Biotech iShares (IBB), but Illumina (ILMN) rose above the crowd with a big gain and three month high. The long-term chart also looks bullish. The table below shows the Biotech iShares and the top ten stocks (sans Celgene) ranked by the 3-month Rate-of-Change. I left out Celgene because it is being acquired by Bristol Meyers (BMY). Notice that IBB is down 8.73% and eight of the top ten stocks are down. Gilead (GILD) is up a little and Illumina (ILMN) is the runaway leader with an 11.25% gain. On the Read More 

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Weyerhauser $WY Cuts Up A Nice Pattern

by Greg Schnell

Weyerhauser (WY) is a forestry stock with a nice pattern setup. As a commodity stock, we want to buy near the lows. While this week's move was aggressive, it is happening industry-wide; through mill closures to slow supply, the stocks are starting to respond. The Full Stochastic is firing off a signal on this 5.25% dividend payer. I like the higher low on the PPO momentum indicator as well. Notice how high this momentum low on the PPO is compared to the previous low. That change in momentum is the type of price pattern we see near lows. If the stock can break through the Read More 

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Real Estate Is Getting Back In Shape!

by Julius de Kempenaer

The Relative Rotation Graph for US sectors shows the sector Real Estate (XLRE) inside the weakening quadrant, but that sector moving upward (almost vertically) on the JdK RS-Momentum scale. This type of rotation usually indicates that a second (or third, etc.) leg of a relative uptrend is about to get underway. Inspection of the unadjusted* price chart of _XLRE below shows that this sector cleared an important overhead resistance area in March and broke out of a three-year range. Following a re-test of the breakout level, Real Estate is now pushing Read More 

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Ford Shines within a Rather Dull Auto Group

by Arthur Hill

It has been a tough three months for most auto stocks with the Global Auto ETF (CARZ) falling around 1.22%. In contrast, the S&P 500 SPDR (SPY) is up 4.21% since March 11th. Within the group, Ford (F) Daimler-Chrysler (DDAIF) and Toyota (TM) show gains during this period, while the other six show losses. Note that Tesla is by far the biggest loser with a 25% decline. Ford is the clear performance leader and the price chart also looks bullish. First and foremost, the long-term evidence points to an uptrend here.  The stock broke above its September-December Read More 

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eBay Is Worth Revisiting $EBAY

by Greg Schnell

eBay (EBAY) had a nice run from mid-2016 to January 2018, but trended down all of 2018. Since then, though, eBay has wiped out most of that drop and now sits at a pivotal $38. The chart below tells the story better. The SCTR shows eBay outperforming most other stocks, which is a good start. I particularly like the breakout in relative strength and the full stochastic turning up while staying above 20. In general, that is a bull market trait. The price consolidating sideways after such a big thrust up in early 2019 is pretty normal. It seems more likely that Read More 

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Mind the Gap in JP Morgan

by Arthur Hill

Stocks moved sharply higher last week with several bouncing off broken resistance levels with gap reversals. JP Morgan is one such stock and last week's gap becomes the first area to watch going forward. The chart shows JPM breaking out in mid April with a surge to the 116 area. The stock then fell back to the breakout zone around 106 and found support here. This is a classic tenet of technical analysis: broken resistance turns support. In addition, note that the May decline retraced 50-61.8% of the prior advance. Thus, it looks like two steps forward and one step backward (correction) Read More 

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FedEx Files For Divorce $FDX, $AMZN

by Greg Schnell

FedEx announced that it has made a strategic decision to not renew the FedEx Express contract for Amazon's US domestic service. In the announcement, the press release mentioned that Amazon made up 1.3% of the total revenue for FDX. While the news sounds particularly rough, the FDX stock price traded up on the news an hour later. For technicians, the news ties in with a beautiful place on the charts. This is one of those time stamp moments. The StockCharts Technical Ranking (SCTR) indicator compares price action across the large cap stocks. The SCTR is at the Read More 

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Value Is Taking Over From Growth And Shows Positive Rotation On RRG

by Julius de Kempenaer

One of the Relative Rotation Graphs that I like to follow, as a way of keeping a handle on the bigger picture, is the one that shows the rotation of growth- versus value stocks. This RRG is predefined in the dropdown box under the header "US MARKETS" and shows the rotation of the Dow Jones US Growth index against the Dow Jones US Value index. The benchmark is set as the Dow Jones US Index ($DJUS). If you click on the image above and then on "Live Chart" in the subsequent link, you can monitor the actual rotation on a Read More 

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A Bullish Continuation Pattern Evolves for Accenture

by Arthur Hill

Semiconductor stocks fell hard in May, but many software names held up quite well in May and simply consolidated. Accenture is one such name as the stock held above the breakout zone and simply consolidated the last five weeks. First and foremost, the long-term trend is up because Accenture (ACN) is above its rising 200-day SMA. In addition, the stock hit a 52-week high in early May and remains above the breakout zone (blue area). After a gap and surge to new highs, the stock consolidated above the 170 level. I elected to draw the lower line of a triangle after Tuesday's bounce and this Read More 

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Hexcel Bucks the Selling and Holds the Break Zone

by Arthur Hill

May was a tough month for the broad market indexes and nine of the eleven sectors. Only the Utilities SPDR and Real Estate SPDR advanced in May as the other nine sectors fell. Stocks that closed higher in May bucked some serious selling pressure and could be worth a second look. Hexcel (HXL) is one such stock because it advanced in May and even hit a new high in late May. The chart shows the stock surging above its 200-day SMA in January and then embarking on a consolidation from February to May. A triangle formed as the stock digested these gains and HXL broke out of the triangle with a Read More