Don't Ignore This Chart!StockCharts.comExpert market commentary from StockCharts.comtag:stockcharts.com,2019-04-18:blog-272024-03-15T18:12:50ZMissed Out on Micron's 112% Surge? Here's Your Second Chance!Karl Montevirgentag:stockcharts.com,2024-03-15:post-273452024-03-15T18:12:49Z2024-03-15T12:50:39Z<p><img src="https://d.stockcharts.com/img/articles/2024/03/15/9c4a9d0c-b90f-47b8-8c35-ed4d9598dea4.jpg" style="display: block; margin: 0px auto;"></p><p>Micron Technology, Inc. (MU) hit an all-time high of $101.85 last week, but it couldn't sustain or surpass it.</p><p>Leading up to its apex was a solid year-and-a-half of gains, returning 112% from September 2022 to the present. The latest narrative fueling the stock's bullish case is that MU has joined the AI party. Having already been selected by Nvidia (NVDA) to provide high-bandwidth memory (HBM) components for its next-gen AI chips, analysts note that this might extend to Advanced Micro Devices (AMD).</p><p>An opportunity for future growth? Fundamentally speaking, yes. But does MU look a little toppy? Possibly. Let's take a closer look.</p><p><img src="https://lh7-us.googleusercontent.com/hpiC8bNk6kVPORz_TVObmxT2-HVaOy-rHv2tj72xmMxBYdPhO51NURkgHixQu8VPYhOyYYgdoPaI6j4hIjuLdDD4KuM4BRrS76yyN6FJE5v6caX_fceFmaBzc5nGbEzN6hVUFM0EMqoljgeDmTnHedg"></p><p><span class="image-caption">CHART 1. MONTHLY CHART OF MICRON TECHNOLOGY (MU). Note the shooting star, a harbinger for a pullback.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Overlaying the 60-month <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_averages" target="_blank">simple moving average</a><span target="_blank"> (SMA) representing five years, you can see that prices have often bounced off this average price level. Prices have also reversed twice (in 2021 and 2022) from the resistance range that marked its most recent record high. As MU pulls back, how close might it get to its average five-year price before advancing again?</span></p><p>Also, note the <a href="https://school.stockcharts.com/doku.php?id=glossary_s#shooting_star" target="_blank">shooting star</a><span target="_blank">, which strongly indicates the likelihood of a bearish reversal (a 59% occurrence based on technical analyst Thomas Bulkowski's historical stats).</span></p><h2>Using a <em>Bearish</em> Technical Scan on a Strong Stock to Find a <em>Bullish</em> Signal</h2><p>On Wednesday, MU came up as a scan result for a bearish <strong>Parabolic SAR Sell Signals</strong> scan using the StockCharts scan engine. With an <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:sctr" target="_blank">SCTR score</a><span target="_blank"> above 78 (meaning, not super bullish but not bearish either) and a strong fundamental case as mentioned above, the bearish scan was an effective way to find a potentially strong "long" prospect in the midst of pulling back.</span></p><p>And that's what the chart revealed.</p><p><img src="https://lh7-us.googleusercontent.com/XJ118k_Yw1Gl14S9l-30XilXdMW-9DGdKEics-Ktyj4Nb19qtjur8uR6BkWxKJxCZMDxMvX71VAAxPFkozlPqqcbFKfOWRgJk3xGsQB07xHLdhI-ilIZIajNFPTs7R8O_4ZvUaDgFRVIfotO1oZtWYg"></p><p><span class="image-caption">CHART 2. DAILY CHART OF MICRON TECHNOLOGY. Running a bearish scan on a fundamentally strong stock can sometimes help you identify prospects for a bullish position.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>When MU's price broke below the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:parabolic_sar" target="_blank">Parabolic SAR's</a><span target="_blank"> trailing stop, there was a clear bearish divergence between the price surge and the drop in buying pressure, as indicated by the </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow (CMF)</a><span target="_blank">.</span></p><p target="_blank">Given MU's strong fundamental prospects, investors might be looking for entry points. In that case, the 50-day, 100-day, and 200-day simple moving averages (SMAs) have been plotted to anticipate potential reversals toward the upside. In addition to this, notice how the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">Stochastic Oscillator's</a><span target="_blank"> reading coincides well with MU's cyclical movements.</span></p><p><img src="https://d.stockcharts.com/img/articles/2024/03/15/65964197-bb22-48da-accd-0134ae7188e1.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><p>The idea is to look to both the Stochastic Oscillator and the SMAs to anticipate and identify a reversal that might serve as a long entry point. The reversal candlestick should be supported by substantial volume and momentum. The Stochastic Oscillator, whose cyclical fluctuations seem very much in sync with MU's swings, and the SMAs can both help you time a favorable entry.</p><h2>The Bottom Line</h2><p>Having used a bearish scan (Parabolic SAR Sell Signals) to uncover a bullish opportunity, Micron Technology Inc (MU) presented itself as a potential trade prospect. Having reversed from its all-time high, the fundamental case for MU remains strong. The bearish scan initially suggested a sell, revealing the opposite—a buying opportunity amidst a pullback. This approach underscores the value of a nuanced analysis, where bearish technical signals in the context of solid fundamentals can identify opportune moments for strong trade. In the case of MU, you'll have to see if this thesis pans out as it dips further down.</p><hr><h3>How to Run a StockCharts Scan </h3><p>Finding the right stocks and exchange-traded funds (ETFs) to trade can be tricky. But with a little work, you can create a strategy identifying a few promising prospects.</p><p>Fortunately, it isn't too hard to learn how. Just stick to these steps:</p><ul><li>Select (or create) a few different scan criteria</li><li>Be sure to run these scans regularly</li><li>Analyze the stocks (or ETFs) that your scan has identified</li><li>Determine your overall trading setup (including your entry and exit criteria)</li></ul><p>The <a href="https://support.stockcharts.com/doku.php?id=scans" target="_blank">StockCharts Scan Engine</a><span target="_blank"> is helpful in narrowing down stocks and ETFs that match specific requirements. It comes with many ready-made scans that are a good starting point. As you get the hang of these scans, you can adjust them or create new ones that align with your trading goals.</span></p><p>For example, this article was prompted by a <strong>Parabolic SAR Sell Signals</strong> scan. As you can imagine, there are plenty more scans you can run. Try out the StockCharts <strong>Sample Scan Library (Charts & Tools > Sample Scan Library)</strong></p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p><p><em>The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.</em></p>Micron Technology, Inc. (MU) hit an all-time high of $101.85 last week, but it couldn't sustain or surpass it.Leading up to its apex was a solid year-and-a-half of gains, returning 112% from September 2022 to the present. The latest narrative fueling the stock's bullish case is that MU has joined the AI party. Having already been selected by Nvidia (NVDA) to provide high-bandwidth memory (HBM) components for its next-gen AI chips, analysts note that this might extend to Advanced Micro Devices (AMD).An opportunity for future growth? Fundamentally speaking, yes. But does MU look a little...Is Coinbase Stock About to Crater? Here's One Way to Exploit ItKarl Montevirgentag:stockcharts.com,2024-03-12:post-273362024-03-12T22:46:52Z2024-03-12T22:46:52Z<p>With an astounding SCTR score of 99.6, Coinbase (COIN) is soaring to the sun, but its wings of momentum appear to be melting.</p><p>Despite hitting a two-year high (and Bitcoin hitting an all-time high), the entire crypto marketspace is in a foggy haze of confusion, stemming from the Federal Reserve's March 11 Bank Term Financing Program (BTFP) expiration (which can affect liquidity and affect various markets including Bitcoin), and the upcoming Bitcoin halving mid-April. COIN's potential bearish setup is clear. As an aside, it also came up as part of a bearish Filled Black Candles scan using StockCharts' scan engine.</p><p>So, if you're looking to maul a few hopeful bulls in the near-term, here's your potential kill box.</p><p><img src="https://lh7-us.googleusercontent.com/kBfZKI7kPpwZngvnzUeCwgRcuKj6VokAXLuKBvdpCU_xyKHHMpRzvlbdlwIV9J6qi0Qjkj9KpqhYqz03IS6hjU7EAkGqzKopOCktLbcbhY8dIwoWHc-Y4OHg4SJ3FRyf-WJ5CxEsGE7svBk6kKO9sH8" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 1. DAILY CHART OF COINBASE.</span></p><p>The <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi" target="_blank">Relative Strength Index (RSI)</a><span target="_blank"> locates COIN's price, well within "overbought" territory. But if you look at the </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow (CMF)</a><span target="_blank"> reading, not only do you see a dramatic divergence between buying pressure and soaring prices, but the CMF is now below the zero line, hinting that </span><em target="_blank">sellers are potentially taking over. </em>Yet if you look at the current candle, you see a <em>strong rejection off the session lows</em>, meaning that a lot of buyers jumped in to create the "pin bar" that we now see (see blue circle highlighting the wick).</p><p>So, what do you think might happen once price falls below the pin bars low?</p><h2>One Possible Way to Trade This</h2><p>There are likely several stop losses right below the wick at $242.09 (see black dotted line). If prices fall below this level, it's likely to trigger a cascade of sell orders (stop losses).</p><ul><li>If you're looking to take advantage of this bear run, you might set a sell stop order to go short at $242.05.</li><li>You might think of placing a stop loss (buy to cover) at $271.70 (just five cents above the most recent swing high).</li><li>Your first target would be anywhere in the range between the middle <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:bollinger_bands" target="_blank">Bollinger Band</a><span target="_blank"> and the resistance line at approximately $188.00.</span></li><li>Your second target would be at the support line located at $166.00, the last major swing low.</li></ul><p>Bear in mind that this is not a long-term trade but a short-term bearish opportunity. It has no bearing on any fundamental case—bullish or bearish—surrounding COIN's longer term prospects.</p><h2>The Bottom Line</h2><p>Despite its stellar SCTR score of 99.6 and seemingly unstoppable ascent, Coinbase (COIN) may be flying too high, risking a dramatic fall. For those who smell a bearish opportunity, this potential descent offers a clear setup for entry and exits. Be careful! Going short the market can assume unlimited. Hence, the stop loss is a few cents above the highest high.</p><h2>How to Run a StockCharts Scan</h2><p>Finding the right stocks and exchange-traded funds (ETFs) to trade can be tricky. But, with a little work, you can create a strategy that identifies a few promising prospects.</p><p>Fortunately, it isn't too hard to learn how. Just stick to these steps:</p><ul><li>Select (or create) a few different scan criteria</li><li>Be sure to run these scans regularly</li><li>Analyze the stocks (or ETFs) that your scan has identified</li><li>Determine your overall trading setup (including your entry and exit criteria)</li></ul><p>The <a href="https://support.stockcharts.com/doku.php?id=scans" target="_blank">StockCharts Scan Engine</a><span target="_blank"> is useful for narrowing down stocks and ETFs that match certain requirements. It comes with a bunch of ready-made scans that are a good starting point. As you get the hang of these scans, you can adjust them or create new ones that align with your trading goals.</span></p><p>For example, this article was prompted by a Runaway Gap Ups scan. As you can imagine, there are plenty more scans you can run. Try out the StockCharts Sample Scan Library (Charts & Tools > Sample Scan Library).</p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p><p><em>The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.</em></p>With an astounding SCTR score of 99.6, Coinbase (COIN) is soaring to the sun, but its wings of momentum appear to be melting.Despite hitting a two-year high (and Bitcoin hitting an all-time high), the entire crypto marketspace is in a foggy haze of confusion, stemming from the Federal Reserve's March 11 Bank Term Financing Program (BTFP) expiration (which can affect liquidity and affect various markets including Bitcoin), and the upcoming Bitcoin halving mid-April. COIN's potential bearish setup is clear. As an aside, it also came up as part of a bearish Filled Black Candles scan using...WFC Stock: A Step-By-Step Analysis to Better Time Your EntryJayanthi Gopalakrishnantag:stockcharts.com,2024-03-12:post-273322024-03-12T19:59:34Z2024-03-12T19:59:34Z<p><img src="https://d.stockcharts.com/img/articles/2024/03/12/cf23fc1f-4043-473f-b82c-744436ebfefe.jpg" style="display: block; margin: 0px auto;"></p><p>Wells Fargo (WFC)'s stock price has been trending higher since November 2023, after it broke out above a downward-sloping trendline. The company has had its share of woes, which is evident in its stock price's choppy movement. Overall, though, the stock, along with other big banks, has been trending higher and has hit a new all-time high.</p><p>So is the stock worth buying? Let's analyze the Financial sector and dive into WFC's stock charts.</p><h2>Bullish Percent Index</h2><p>The chart below of the S&P Financial Sector Bullish Percent Index ($BPFINA) shows it's at 86.11, indicating the Financial sector is bullish. The indicator is turning higher, which suggests that financials may still continue to trend higher.</p><p><img src="https://d.stockcharts.com/img/articles/2024/03/12/d5d6bf38-3a8d-4275-886b-833c3a1dee29.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 1. S&P FINANCIAL SECTOR BULLISH PERCENT INDEX (BPI). The Financial sector is bullish and could remain that way for an extended period of time.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><h2>Sector Summary</h2><p>If you look at the one-month sector performance using the StockCharts Sector Summary, the Financial Select Sector SPDR (XLF), a proxy for the sector, isn't the highest performer, but it has the second highest <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:sctr" target="_blank">StockCharts Technical Ranking</a> (SCTR) score of 89.</p><p><img src="https://d.stockcharts.com/img/articles/2024/03/12/193eba1a-7947-4c41-a2a6-9f1731adccce.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 2. ONE-MONTH SECTOR SUMMARY. The Financial sector may not be the top sector performer, but it has the second-highest SCTR score, which makes it a strong-performing sector.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Both data points suggest that the Financial sector is strong and that it is worth checking out WFC stock.</p><h2>Symbol Summary</h2><p>The <strong>Symbol Summary</strong> tool in StockCharts gives you a bird's-eye view of a stock or exchange-traded fund. Enter WFC in the symbol box and review WFC's stock chart, fundamental data, technical data, earnings history, SCTR rank, and the predefined scans with WFC. As of this writing, WFC was filtered in four scans—New 52-week Highs, Moved Above Upper Price Channel, P&F Ascending Triple Top Breakout, and P&F Double Top Breakout. The stock appears to be technically strong and gaining strength.</p><h2>Monthly Chart of WFC Stock</h2><p>Looking at a 20-year monthly chart, you can see that WFC had its share of choppy movement.</p><p><img src="https://d.stockcharts.com/img/articles/2024/03/12/19f52747-5771-4c0f-94d1-f2390ae910f7.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 3. MONTHLY CHART OF WELLS FARGO STOCK. The stock is trending higher, but will it pull back?</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Overlaying the 120-month <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_averages" target="_blank">simple moving average</a> (SMA) on the monthly chart (representing 10 years), you see that despite the choppy price movement, WFC has been gently trending higher, with the price reverting to average price movement. Since the stock is trading much higher than average, is it likely to pull back?</p><h2>Daily Chart of WFC Stock</h2><p>The daily chart of WFC below has a 50-day SMA overlaid on price. The pattern of price movement is similar, in that price tends to revert to the SMA after it deviates from it. So is WFC too toppy, or is it worth the investment after a pullback?</p><p><img src="https://d.stockcharts.com/img/articles/2024/03/12/ff4a888e-4b7a-4c31-8005-d4c52459a9f5.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 4. DAILY CHART OF WELLS FARGO STOCK. The stock may be looking toppy, but, if the momentum is still strong, the stock could continue to rise.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>When a stock hits an all-time high, there's a reason it's moving higher. The stock will continue rising as long as the momentum supports the price move. This is why it helps to add a momentum indicator. There are several to choose from—Moving Average Convergence/Divergence (MACD), Relative Strength Index (RSI), Average Directional Index, and <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:rate_of_change_roc_and_momentum" target="_blank">Rate of Change</a> (ROC), to name a few.</p><p><img src="https://d.stockcharts.com/img/articles/2024/03/12/2c5f0b3b-0bc5-40a9-bc30-5221e0e815ca.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><p>In this example, the ROC is added to the lower panel below the price chart. Notice the indicator fluctuates above and below the zero line. When the ROC is above the zero line, it indicates positive momentum. The ROC has pulled back, and could reverse and move higher. If ROC moves below the zero line, that's a signal that momentum is slowing. Note how, in previous pullbacks to the 50-day SMA, the ROC went below the zero line, reversed, and moved back higher.</p><h2>The Bottom Line</h2><p>Even though WFC stock is hitting all-time highs, the momentum hasn't shown signs of slowing down. If you're nervous about buying a stock that looks toppy, the charts show that WFC could pull back. As long as it stays above its 50-day moving average on the daily chart, you could enter a long position as long as the Financial sector remains healthy and the upward momentum is strong in the stock. If you want to wait till WFC pulls back, it may require some patience—a necessary trait for successful traders and investors.</p><hr><p><strong><em>Disclaimer: </em></strong><em>This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>Wells Fargo (WFC)'s stock price has been trending higher since November 2023, after it broke out above a downward-sloping trendline. The company has had its share of woes, which is evident in its stock price's choppy movement. Overall, though, the stock, along with other big banks, has been trending higher and has hit a new all-time high.So is the stock worth buying? Let's analyze the Financial sector and dive into WFC's stock charts.Bullish Percent IndexThe chart below of the S&P Financial Sector Bullish Percent Index ($BPFINA) shows it's at 86.11, indicating the Financial sector is...Target's Stock Defied Gravity When the Market Tanked: Timely Buy or FOMO?Karl Montevirgentag:stockcharts.com,2024-03-06:post-273052024-03-12T22:36:50Z2024-03-06T20:16:02Z<p>On Tuesday, Target Corp (TGT) was one of only nine stocks that bucked the market selloff, popping 13% on a <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:gaps_and_gap_analysis" target="_blank">Runaway Gap</a><span target="_blank"> as the Dow Jones cratered -404 points, the S&P 500 fell over 1% and the Nasdaq plunged 1.56%.</span></p><p><img src="https://lh7-us.googleusercontent.com/6fYVdr-ffJLiQzNwgNOt3vTvuNAgvwsfi9Wy0stSKkjwKKzxyCQTriW7FJXMykPgFp69mKZSbIov5PeZJQK-js2JlRlbyoV4_HgRGt_OWBqs3CKSWvt0iepBkAmpGlf_1IZN8uIGGhV-xZQfqES3-iM" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 1: STRONG VOLUME GAINERS SCAN ON TUESDAY 3.05.24. TGT came up as a result of a Strong Volume Gainer scan on StockCharts' scan engine. Target Corp also held an SCTR score of 91.2, indicating strong technical bullishness.</span></p><p>On the following day, Target gapped up again. So what's driving the bullishness?</p><p>Target's holiday-quarter revenue and earnings crushed Wall Street expectations on Tuesday. Despite the company issuing a gloomier sales forecast for 2024, bullish investors jumped in, causing price to spike (and gap) twice. Before taking a closer technical look into TGT, though, some traders might ask:</p><ul><li>Was it prudent to follow the bullish trend post-earnings? After all, some analysts think that Wall Street consensus set a low bar for expectations. What if this is the case?</li><li>If you are bullish on TGT, while keeping in mind the company's soft forecast for 2024, when might be an opportune time to enter a long position, assuming that share prices will eventually decline?</li></ul><p><img src="https://lh7-us.googleusercontent.com/gxvLsg8Cci4GQOX6tZXvbploO6EHrga4NaAuIXR8npJhSIiwZsZineIBdMKCbT5zgR5U9z4CuO86dr471zWOSxO31nmklTUbbkO8JbcjBUtb7bfxk2bVp3rFODpQ5orhdFMgHiEXvS0PtXbH0RGQohw" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 2: WEEKLY CHART OF TARGET (TGT). TGT finds resistance at the top of a trading range tested three times between 2022 and 2023.</span></p><p>Target shares are far from their 2021 all-time highs. Though the stock hit a 52-week high today, that high coincided with strong critical resistance (see dotted blue line) and immediately fell back.</p><p>If TGT's current uptrend were to continue, it would have to break above this level. That can certainly happen, but what are the chances of it happening anytime soon?</p><p><img src="https://lh7-us.googleusercontent.com/h4h0V8U48Sokk7W3CVRg2ERC08GJEZ3wKEGvL655bO78b5iSMrBJqIrDfhUs7xFlLr2AwYRzL-9R3k5oUIWgGkeITrI3ElCm-nPPTAa3t2vehKSJfrs7aDBNz60MKshzBuHLZNFhQEojEycYisYUHPI" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 3: DAILY CHART OF TARGET (TGT). Strong divergence between price and buying pressure.</span></p><p>The second candlestick from the last session shows the 13% spike (and gap) that took place post-earnings. Runaway gaps, according to technical analyst Thomas Bulkowski, are quite bullish with only an 8% chance of getting filled within the week of the gap. </p><p>But the second gap, showing strong rejection from the resistance level we saw in the previous chart, is looking more and more like a possible exhaustion gap, which has a 60% chance of getting filled within the week. Plus, take a look at the lack of volume driving the gap (see red vertical dotted line).</p><p>Looking at the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:money_flow_index_mfi" target="_blank">Money Flow Index (MFI)</a><span target="_blank">, which is something of a volume-weighted RSI, we see a steady divergence between it and TGT's three-month surge, indicating that buying pressure is indeed dwindling. This thesis is even more pronounced when viewing the </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow (CMF) </a><span target="_blank">alongside the MFI.</span></p><h2>Watch for These Two Things</h2><p>Drawing a Fibonacci retracement would be a bit premature, as the top hasn't yet been confirmed. However, supposing that it was, the 50% Fib retracement line would coincide with the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:volume_by_price" target="_blank">Volume-by-Price</a><span target="_blank"> indicator's second largest bar, around the $140 range.</span></p><p>Technically, if TGT were to top here, that range might serve as a favorable entry point. If that were to be the case, you might set a price alert at $150 to call your attention to the potential setup if and when it happens. But on the fundamental front, you might want to wait for clear signs that TGT has overcome its recent dip in <em>customer traffic</em> as it heads into fiscal 2024. Traffic is key to TGT's earnings, particularly considering its forecasts for weaker quarters ahead.</p><p>And just to throw in a little more context, July and August are the retailer's strongest months relative to the broader market (at least from a 10-year seasonality perspective), as shown below:</p><p><img src="https://lh7-us.googleusercontent.com/yW9Rx6EKI_bWEV9m_0mz_nX8HbO3PisJb4zPHDQF3TESaF87jFQG8qQP_aqhU4T6WIdST0EnVE_Po32eu_4V3rgL2sTlCC83JNTvMC44NLoPrCpwcMS6dT4FB1R643-NvwjgwpyFAo8KWLtEWEKssl8" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 4: 10-YEAR SEASONAL CHART OF TGT PERFORMANCE AGAINST THE S&P 500. Note its strongest returns relative to the S&P 500 taking place in July (2.4%) and August (3.3%).</span></p><h2>How To Set a Price Alert</h2><p>Setting a technical alert at these support and resistance levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision.</p><p>To access the Technical Alert Workbench, follow these steps:</p><ul><li>Log in to your StockCharts account.</li><li>Click on <strong>Your Dashboard.</strong></li><li>Click the <strong>Alerts</strong> button or the <strong>New</strong> button in the <strong>Your Alerts</strong> panel.</li><li>In the Alerts workbench, choose which type of alert you want to create from the <strong>Alert Type</strong> buttons at the top left.</li><li>To create a price alert, select <strong>Price Alert</strong> as the alert type.</li><li>Add a symbol in the symbol box, set your price trigger, and choose how you wish to be notified.</li><li>Click the <strong>Save Alert</strong> button.</li></ul><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p><p><em>The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.</em></p>On Tuesday, Target Corp (TGT) was one of only nine stocks that bucked the market selloff, popping 13% on a Runaway Gap as the Dow Jones cratered -404 points, the S&P 500 fell over 1% and the Nasdaq plunged 1.56%.CHART 1: STRONG VOLUME GAINERS SCAN ON TUESDAY 3.05.24. TGT came up as a result of a Strong Volume Gainer scan on StockCharts' scan engine. Target Corp also held an SCTR score of 91.2, indicating strong technical bullishness.On the following day, Target gapped up again. So what's driving the bullishness?Target's holiday-quarter revenue and earnings crushed Wall Street...Market Maker Manipulation on AAPL Has Been Egregious in 2024Tom Bowleytag:stockcharts.com,2024-03-03:post-272952024-03-03T22:00:00Z2024-03-03T22:00:00Z<p>Be honest. How many of you thought that Apple (AAPL), Alphabet (GOOGL), and Tesla (TSLA) could struggle collectively, while the S&P 500 continued to set record high after record high? I'm not surprised at all, because secular bull market advances are stubborn and money rotates when former leaders stall. That's one of the hallmarks of a bull market. They're incredibly resilient.</p><p>Today, I want to focus on AAPL, because it's providing early signals that it will soon rejoin the bull market leadership. Here's the daily chart:</p><p><img src="https://stockcharts.com/img/articles/2024/03/03/14c63a12-a91e-4fbd-aef9-40aa13af7f86.jpg"></p><p>Here's what I see when I look at the AAPL chart:</p><ol><li>AAPL's leadership ended with the emergence of a negative divergence in late 2023</li><li>AAPL gapped lower to begin 2024 and started a period of market maker manipulation where AAPL fell nearly 13 bucks. But AAPL, collectively during the past two months, fell 27 bucks at the opening bell and during the first 90 minutes of trading. In the final 5 hours of trading during January and February, AAPL actually gained nearly 15 bucks. There were plenty of afternoon buyers (market makers) accumulating shares while unaware retail traders were being encouraged to sell during the weak morning hours</li><li>The AD line has moved steadily higher in 2024, underscoring this accumulation</li><li>Price support near the 180 level is quite clear</li><li>AAPL broke down intraday on Friday, but recovered in the afternoon, printing a doji, one form of a reversing candlestick</li></ol><p>While I believe AAPL is poised to regain its leadership role sooner rather than later, which will help large cap stocks and our key indices, I've begun to rotate more and more towards small cap stocks. I'm so bullish on small caps right now that I've decided to feature 3 excellent small cap trading candidates this week in my FREE EB Digest newsletter. If you're interested in learning more about these stocks and their significant upside potential, <a href="https://www.earningsbeats.com/public/subscribe.cfm?ref=tp" target="_blank">CLICK HERE</a><span target="_blank"> and sign up for our EB Digest with your name and email address - it's absolutely FREE!</span></p><p>Happy trading!</p><p>Tom Bowley, Chief Market Strategist, EarningsBeats.com</p>Be honest. How many of you thought that Apple (AAPL), Alphabet (GOOGL), and Tesla (TSLA) could struggle collectively, while the S&P 500 continued to set record high after record high? I'm not surprised at all, because secular bull market advances are stubborn and money rotates when former leaders stall. That's one of the hallmarks of a bull market. They're incredibly resilient.Today, I want to focus on AAPL, because it's providing early signals that it will soon rejoin the bull market leadership. Here's the daily chart:Here's what I see when I look at the AAPL chart:AAPL's leadership...AMD's Sensational Halt — What You Need to WatchKarl Montevirgentag:stockcharts.com,2024-02-23:post-272592024-02-23T22:13:29Z2024-02-23T22:13:29Z<p>If you ran a StockCharts Gap Ups scan on Thursday, chipmaker Advanced Micro Devices (AMD) would have come up on your list. The company might have missed Q4 2023 earnings expectations (though it beat on revenue), causing it to slump, but prices bounced quickly thereafter. Fundamentally speaking, its data center and client services, especially when factoring in AI, makes AMD a fundamentally solid buy.</p><p>The gap from its post-earnings low reveals that bulls see the retest of that low as a fundamental-based buying opportunity. But technically, is AMD a favorable buy? Let's start with a longer-term view of AMD's price action.</p><p><strong><img src="https://lh7-us.googleusercontent.com/ko2-poGSOjsMRnHA9CuA2D021VlhQ7y36VkaOsrPrN0ZWx4IUMuU9IiImXJMwRbt7FBaLv2v4UQntZDUYkVfm6TsIDUJFyO-TzvkMfeztFxJF23iMrxv1-Qyd6ENigEawLlGJWTAgwH9cqy80o3B2_M" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 1. WEEKLY CHART OF AMD. The year-long current rally came to a halt with a two-month rectangle pattern.</span></strong></p><p>The introduction of OpenAI's ChatGPT created a turbulent environment for AMD, serving as a driving and pressuring factor to which the chipmaker's future prospects hinged.</p><p>Perhaps this explains the company's three-year <em>underperformance</em> in its own industry (semiconductors). That's most likely due to Nvidia's (NVDA) emergence as the top AI chipmaker following ChatGPT's commercial debut. But, as you can see from the above weekly chart, AMD has outperformed the general tech sector (XLK) by almost 29% and the S&P 500 ($SPX) by over 55% in the same three-year period.</p><p>Reaching all-time highs in the last few months, AMD prices are bouncing within a narrow range, forming a two-month <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:rectangle_continuation#:~:text=A%20Rectangle%20is%20a%20continuation,and%20bottom%20of%20a%20rectangle." target="_blank">rectangle top</a><span target="_blank">; the last week ending with a </span><a href="https://school.stockcharts.com/doku.php?id=chart_analysis:candlestick_pattern_dictionary#spinning_top" target="_blank">spinning top</a><span target="_blank"> indicating market indecision. </span>And that state of indecision leads the stock to where it is today.</p><p><strong><img src="https://lh7-us.googleusercontent.com/b0AWJHRIe1iarBttIXyjq-DpfmKDhl7MrZPHmK1_j05K7FAZIqUN87u-cSK237bnqYASYvoTrMInRZgU4__V2aNh4GfOefJgEgu5BA1tHa7-d0v7xuqJjjdS0qEigpoGLX2bZmr-EBIew1KAfOvMTCw" style="display: block; margin: 0px auto;"><span class="image-caption">CHART 2. DAILY CHART OF AMD. There are two possible ways to trade this, depending on whether you're looking to exploit a short-term or longer-term opportunity.</span></strong></p><p>The gap that came up during the Gap Ups scan turned out to be a <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:gaps_and_gap_analysis#:~:text=A%20common%20gap%20usually%20appears,exacerbated%20by%20low%20trading%20volume." target="_blank">common gap</a><span target="_blank">. In short, it's likely to get filled and is generally </span><em target="_blank">inconsequential </em><span target="_blank">(unlike a breakaway, runaway, or exhaustion gap).</span></p><h2>Swing Trading AMD's Rectangle Breakout</h2><p>Instead, what you want to focus on is the rectangle top. Rectangle chart patterns can be bullish or bearish depending on market sentiment and the direction of the breakout. According to Thomas Bulkowski's statistics...</p><ul><li>Its average rise/decline stands at 51%/13%</li><li>Pulling back to the breakout level (within 30 days) is 66% from the upside and 64% from the downside.</li><li>Its percentage of meeting price targets is 78% on the upside and 54% on the downside.</li></ul><p>And how are price targets measured? You'd calculate the height of the pattern (subtract the top price from the bottom price), add that figure to the top price (for an upside target) and subtract the figure from the bottom of the rectangle (for a downside target).</p><p>The top of the AMD rectangle pattern is approximately $184.90 and the bottom is approximately $162. This gives you a height of $22.90. Following the target calculation above, you get the following targets:</p><p>Note, these targets represent 100% of the measured move. Some traders might take profits at around 60% (it's really up to the trader).</p><ul><li>$207.80 – upside target</li><li>$139.10 – downside target</li></ul><p>The stop loss levels are relatively deep, as some traders might place stop losses on the opposite end of the rectangle breakout.</p><p>But what if you're bullish and trying to enter a longer-term position?</p><h2>Buying the Dip for a Long-Term Hold</h2><p>Notice the 50-day <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_averages#:~:text=A%20simple%20moving%20average%20is,closing%20prices%20divided%20by%20five." target="_blank">Simple Moving Average (SMA)</a><span target="_blank">, </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:ichimoku_cloud" target="_blank">Kumo (Ichimoku Cloud)</a><span target="_blank">, </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:money_flow_index_mfi" target="_blank">Money Flow Index (MFI)</a><span target="_blank">, and the </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_average_convergence_divergence_macd" target="_blank">MACD</a><span target="_blank">.</span></p><ul><li>The MFI, like a volume-weighted RSI, shows a bearish divergence and significant decline in buying pressure, giving an indication that a pullback is likely (but how deep, and whether it breaks below the rectangle, remains to be seen).</li><li>The 50-day SMA and Kumo give a range of support to which you might anticipate a bullish reversal (wait for a bounce plus any indication, be it candle or volume, of strong bullish momentum).</li><li>And finally, you might look for the MACD to cross the signal line to support any price event that potentially signals an upward turn.</li></ul><h2>The Bottom Line</h2><p>The initial Gap Ups scan might have alerted you to a potentially bullish situation with AMD, whose fundamentals also seem favorable. But looking at the big picture on a weekly scale, you can see a wide area of congestion (which<em> can</em> indicate some level of market indecision) ending with a spinning top (indicating, more clearly, indecision). Rectangles can break either way. And this sense of indecision also reflects the technical vs. fundamental picture. So, as Jim Cramer would famously ask, is this an "investment" or a "trade"? Whatever you decide, the strategies for both are outlined above.</p>If you ran a StockCharts Gap Ups scan on Thursday, chipmaker Advanced Micro Devices (AMD) would have come up on your list. The company might have missed Q4 2023 earnings expectations (though it beat on revenue), causing it to slump, but prices bounced quickly thereafter. Fundamentally speaking, its data center and client services, especially when factoring in AI, makes AMD a fundamentally solid buy.The gap from its post-earnings low reveals that bulls see the retest of that low as a fundamental-based buying opportunity. But technically, is AMD a favorable buy? Let's start with a...A Very Accurate Sentiment Reading That Is Flashing A RED Light For BullsTom Bowleytag:stockcharts.com,2024-02-18:post-272332024-02-18T11:00:00Z2024-02-18T11:00:00Z<p>While many analysts follow sentiment signals that involve feelings about market direction, I prefer one that follows the MONEY. I want to know what retail traders are doing with their money with respect to options. Extreme readings provide eerily accurate reversals in trend, which are obviously very important to any trader. I like to call the 5-day SMA of the equity-only put-call ratio ($CPCE) my "speed boat" sentiment indicator as it's excellent at predicting SHORT-TERM reversals. I track the CPCE using the User-Defined Index (UDI) tool here at StockCharts.com. Over the past two years, there have been occasions (mostly during Q4 on Wednesdays) when hedge funds have bought a MASSIVE number of equity puts on many of the largest cap companies in the world, like Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), Alphabet (GOOGL), NVIDIA (NVDA), Meta Platforms (META), Tesla (TSLA), etc. These equity puts need to be adjusted OUT of the ratio, because they do not reflect on the retail option trader. Here's my adjusted 5-day SMA of the CPCE over the past couple years:</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/17/2796667c-8ffb-4a22-a2b2-5e17583d7ead.jpg" style="display: block; margin: 0px auto;"></p><p>The CPCE measures the amount of bullishness (low CPCE readings) and bearishness (high CPCE readings) in the options world. Extended periods of bullishness and bearishness are marked in the chart with red arrows and green arrows, respectively, as the 5-day moving average of the CPCE moves toward one extreme or the other. Any time that we see the 5-day CPCE reach the .55-.57 range to the downside (or lower), we can look for a possible short-term market top. Note that subsequent market declines may be quite brief, and sometimes very mild. The takeaway here is to realize that low readings, like the one we have right now, provide us a warning that the RISK of a market decline has increased substantially. Managing risk is a top priority for successful traders.</p><p>This low potentially-bearish reading on the CPCE will very likely impact the timing of our entry into 10 equal-weighted stocks in each of our portfolios at EarningsBeats.com. We just completed the end of our latest quarter, where our flagship Model Portfolio gained 21.87%, easily outperforming the S&P 500's gain of 10.08% over the same period. Since the inception of our Model Portfolio in 2018, its performance has more than doubled the S&P 500 as well, 182.59% vs. 86.03%. We'll be "drafting" our Top 10 Stock Picks for our Model Portfolio, as well as our Aggressive and Income Portfolios, on Tuesday, February 20th, at 5:30pm ET. For more information and to register for this FREE event, simply <a href="https://www.earningsbeats.com/public/February-2024-Top-10-Registration.cfm" target="_blank">CLICK HERE</a>.</p><p>Happy trading!</p><p>Tom</p>While many analysts follow sentiment signals that involve feelings about market direction, I prefer one that follows the MONEY. I want to know what retail traders are doing with their money with respect to options. Extreme readings provide eerily accurate reversals in trend, which are obviously very important to any trader. I like to call the 5-day SMA of the equity-only put-call ratio ($CPCE) my "speed boat" sentiment indicator as it's excellent at predicting SHORT-TERM reversals. I track the CPCE using the User-Defined Index (UDI) tool here at StockCharts.com. Over the past two years...DraftKings' Stock Overheating? Here's What You Need to Do NowKarl Montevirgentag:stockcharts.com,2024-02-16:post-272232024-02-16T18:20:24Z2024-02-16T18:20:24Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/16/e3e68d59-49b4-4111-868b-e92cbfe8a527.jpg" style="display: block; margin: 0px auto;"></p><p>The demand for sports entertainment is constant across each seasonal turn. And for every season, there's a sport in full swing. Though a discretionary item, the demand for fantasy sports and sports betting is tied to the ongoing sports season, and its popularity is only increasing.</p><p>DraftKings (DKNG), one of the more dominant players in this field with a 31% market share lead, has seen such a surge in its stock price that it's become overbought, according to a number of indicators. DKNG was filtered in a bearish <strong>Overbought with a Declining RSI</strong> scan in the StockCharts Scan Engine.</p><p>Yesterday, DraftKings reported earnings, increasing its revenue by 44% and significantly decreasing operating losses while topping estimates in its full-year guidance. Yet while bears may be shadowing or shorting DKNG (it has a 4.35% short interest as of the end of January), many analysts and investors seem bullish on it.</p><p>So, we're looking at a battle between bulls and bears at the edge of a disputed "overvalued" cliff. Who's going to give?</p><h2>Big Picture: DraftKings Has Entered the Retracement Red Zone</h2><p><img src="https://lh7-us.googleusercontent.com/0aYyrgT_lpKubvLSBbw-hrdjyKoP-Cs3BxRS_lEuP3nGY8kxi0KIZjq0rFaDf2k39x-IGIce38AIlsgDgITBlLBMcghm6kSNADeJFtBFYSmECvofo_L0OBm9eppv-UuCjLXJSnHUBQ1Nxo9QC8Jqpd4"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF DRAFTKINGS. DraftKings SCTR reading has been "pedal to the metal" on the upside for a year, despite a few dips. It makes you want to check its relative performance against the broader market, sector, and industry peers. Still, that Fib retracement looks tempting for bears looking to pounce. </span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>With a <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:sctr" target="_blank">StockCharts Technical Rank</a><span target="_blank"> (SCTR) score of 97.5, DKNG's technical readings look exceedingly bullish to the point of overheating. But is it a trap?</span></p><p>Drawing a long-term <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:fibonacci_retracemen" target="_blank">Fibonacci retracement</a><span target="_blank"> from its highest high of $74.38 in March 2021 to its bottom of $9.77 in May 2022, DKNG's recent surge has entered the space above the 50% retracement. </span></p><p>A three-year Fib retracement may seem like a long period, but bears who got in near the top and bulls who got in toward the bottom might see this as an opportunity to close positions with a profit. This leaves those still looking to enter, either long or short, with a bit of a conundrum.</p><h2>DraftKings Stock: An Exhausted Winner?</h2><p><img src="https://lh7-us.googleusercontent.com/igQFidBrKksmwsP9JB0hfqwR1g4MaRKq9Al562Ze4SHq_DPsR4E_8EM-32hSDSAz1vnGmJT9DO9pz55KzbADivx1tvEiynEOLk49pWfrknXXRdq5mWUD-a2FXJj6iyjf25bNa0TlCFRU9kwy3mqZMgM"></p><p><span class="image-caption">CHART 2. DAILY CHART OF DRAFTKINGS. DKNG has been outperforming the market, and its 2024 guidance offers a bullish glimpse into the coming quarters. But it needs a breather, and if you're looking to buy the dip, you need to set a price alert to prepare yourself for it.</span></p><p>As mentioned, DraftKings popped up on an <em>Overbought with a Declining RSI </em>scan. This indicates bearish divergence: prices have risen into overbought territory while the RSI reading is falling.</p><p>If you look at the panels above the price chart, the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi" target="_blank">relative strength index</a><span target="_blank"> (RSI) is paired with a </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:money_flow_index_mfi" target="_blank">Money Flow Index</a><span target="_blank"> (MFI) indicator—a volume-weighted RSI—to confirm and show more clearly this divergence, which is barely visible on the RSI (black dotted lines).</span></p><p>Now, look at the three price performance indicators in the panels below the price chart. This illustrates the extent to which DraftKings has outperformed the S&P 500 (87.85%), the Consumer Discretionary sector (86.35%), and the Gambling industry (104.71%).</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/16/367b7635-96d5-4437-a6cf-798d92e441f6.jpg" style="display: inline; margin: 0px 15px; float: right; width: 500px;" onclick="window.open('https://stockcharts.com/')"></p><p>DraftKings' performance is that of a winner. And on Friday, a day after reporting its Q4 earnings, it logged in a 52-week high before backing off from its session high. Is its momentum exhausted? The answer is that it can continue running despite its overbought readings.</p><p>Eventually, though, all rallies need a breather. Bears will look for a reversal on strong momentum. Depending on whether they're shorting for the near-term or long-term, their technical price target can be any of several swing lows (all potential support levels) on the way down.</p><p>As for bulls looking to buy on a pullback, you have to wait for a pullback (which hasn't yet happened at the time of writing). The RSI and MFI can help you gauge the depth of the pullback alongside the actual price action (e.g., support and resistance). And if it happens to pull back in the near term, you might want to set a price alert at $34.50, which coincides with its July high and November–December support levels. </p><p>The 50-day, 100-day, and 200-day simple moving averages, all in full sail, can provide you with a favorable support <em>range,</em> which, if you reference it with the Ichimoku cloud range, might help you anticipate a bullish reversal. <em>But you must ensure the upside bounce has enough momentum to be sustainable (e.g. a bullish candle backed by high volume and some follow-through</em>).</p><h2>The Bottom Line</h2><p>To wrap things up, DraftKings stands at a critical juncture, flaunting strong market performance at the edge of near-term burnout. Still, the company forecasts robust prospects for the year to come. Investors looking to get in are waiting for the dust to settle, eyeing the perfect moment to dive into the fray, hoping to catch the next upswing.</p><hr><h3><img src="https://d.stockcharts.com/img/articles/2024/02/16/b6104026-8e90-4857-8c59-71a9e0c835d7.jpg" style="display: inline; margin: 0px 15px; float: left; width: 100px;" onclick="window.open('https://stockcharts.com/')"><strong>Adding Indicators to Charts</strong> </h3><p>Bring up a price chart in SharpCharts and add in the Money Flow Index and other indicators from the Indicators dropdown menu. </p><p><img src="https://lh7-us.googleusercontent.com/55ep4K7-zwnvIooNWrTT9ZKB_AbEB0n39bAPw_-q5A0YtImbuDucV0Ze7PaI-JtNDvl4-idfXPluAJX5SpUlwBfIbBjt9bdAkjTk6-rTwBWS3XMFl1B_RfXaPHiAxLiwNt2mkg-IPOx3cI5lOfx-NZ8"></p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>The demand for sports entertainment is constant across each seasonal turn. And for every season, there's a sport in full swing. Though a discretionary item, the demand for fantasy sports and sports betting is tied to the ongoing sports season, and its popularity is only increasing.DraftKings (DKNG), one of the more dominant players in this field with a 31% market share lead, has seen such a surge in its stock price that it's become overbought, according to a number of indicators. DKNG was filtered in a bearish Overbought with a Declining RSI scan in the StockCharts Scan Engine.Yesterday...Walmart Stood Strong When The Market Crumbled - Time To Buy?Karl Montevirgentag:stockcharts.com,2024-02-13:post-272032024-02-13T22:43:16Z2024-02-13T21:51:24Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/13/88d4b7a1-cebd-450e-8502-4692e46b91f8.jpg" style="display: block; margin: 0px auto;"></p><p>By midday Tuesday, all three US indices had taken a massive plunge as a hotter-than-expected CPI inflation report left awash in red.</p><p target="_blank">What's interesting on days like this is running a <a href="https://stockcharts.com/freecharts/sample/scan-library.html" target="_blank"><em>New All-Time High</em></a><span target="_blank"> scan (using StockCharts' scan engine) to see which stocks bucked the trend (even momentarily) amid such a significant downturn.</span></p><hr><p><img src="https://d.stockcharts.com/img/articles/2024/02/13/1e73ae7c-3412-46f1-a757-6c8ba51d4218.jpg" style="display: inline; margin: 0px 15px; float: left; width: 100px;"></p><p>The <a href="https://support.stockcharts.com/doku.php?id=scans" target="_blank">StockCharts Scan Engine</a> is useful for narrowing down stocks and ETFs that match certain requirements. It comes with many predefined scans that are a good starting point. As you get the hang of these scans, you can adjust them or create new ones that align with your trading goals.</p><p>Try out the StockCharts <strong>Sample Scan Library (Charts & Tools > Sample Scan Library)</strong></p><hr><p>Among the 37 stocks that either stayed afloat or floated higher for the bulk of the trading day, one of the most recognizable names is (drum roll...) <strong>Walmart Inc. (WMT)</strong>.</p><h2>What's Driving the Walmart Buying Spree?</h2><p>Maybe it's the 3-for-1 stock split set for February 26. Or maybe it's simpler than that—its dominance as the world's largest retailer offering staples and discretionary items, consistent revenue growth, and reliable dividend yield, among other reasons. Also, Walmart is set to report earnings on February 20, before the market opens, and perhaps the upswing over the last two months reflects optimism toward the coming report.</p><p>Whatever the case, Walmart's stock price is rising while the broader market is falling quite hard. Right now, investors bullish on Walmart stock are looking for an entry point, a possible dip, or both. So, let's have at it.</p><h2>Walmart Stock Price: Is Momentum Getting Stronger or Weaker?</h2><p><img src="https://lh7-us.googleusercontent.com/kOEQqfrVYbNhj-Qfb3Z_tnBsyNp8VirKTE4JzKAZofl2foboc0Wjrm1PmlParjqeiisqsWzQF0a7u6nHnrX1dNjeqRGThGrPYIX-mt_FgRDUOV0k_Haq2TJw08zLb5YgQefiiFMk5xGih49SMx_Kk7E"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF WALMART. Note the rise in WMT's price against falling momentum and declining relative performance compared with its sector. The SCTR score is also at around 50, which doesn't make WMT a technically strong stock.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Despite the volatility, a wide-ranging period (in 2021), and a few significant drops, Walmart stock's net uptrend has remained relatively solid. Still, judging from the STCR score, well below the bullish 90 line and hovering around the 56 range, its technical ranking is declining, warning of technical weakness despite Walmart's stock price rise.</p><p>In terms of Walmart's performance relative to the Staples sector (using the SPDR Consumer Staples Select Sector Fund XLP as a proxy), Walmart's outperformance stands at 20%, down from 25% last October–November.</p><h2>Walmart Stock Price: Bucked and Retreated</h2><p><img src="https://lh7-us.googleusercontent.com/6rgdkVc2jWELBNj48D0mhhd_EflCRsJ5XTeskIDDvpEyS4MgTK_wEJYrc9s8X-uoPI7EB05nxTRTMnNRZEURVzKfzI38b4vEX-p1SeY9gI9YIQ1dszqtWR2p6adZ-GOrDfqBfARg4N5XqToUYxJV2jM"></p><p><span class="image-caption">CHART 2. DAILY CHART OF WALMART. Layering various indicators to find a confluence of support, establishing a range rather than specific levels, can be helpful when looking for a tricky entry.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>After hitting an all-time high Tuesday morning, Walmart's stock price succumbed to market forces, falling below yesterday's open, signaling the beginning of a pullback.</p><p>Looking at the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">Stochastic Oscillator</a><span target="_blank">, Walmart stock has been hovering in overbought territory since the end of December. But it wasn't until early February that buying pressure began to recede, as shown in the </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow</a><span target="_blank"> indicator, but not to the point where the CMF crossed below the zero line.</span></p><p>Here's one game plan if you're bullish on WMT:</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/13/de1c69f4-5c0f-4673-8aaa-241bdd1e157d.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><ul><li>Set a price alert at around $165.25, near a set of resistance levels that have been tested twice, yet may be too high to consider as reliable support.</li><li>Once Walmart's stock price reaches and hopefully breaches this level, look for early buyers to begin jumping in at $163, coinciding with the 38.2% <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:fibonacci_retracemen" target="_blank">Fibonacci retracement</a><span target="_blank"> line.</span></li><li>Note that an <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:ichimoku_cloud" target="_blank">Ichimoku cloud</a><span target="_blank"> has also been plotted to suggest a wider </span><em target="_blank">support range </em><span target="_blank">(versus specific support levels).</span></li><li>The ideal entry <em>spot</em> (not signal) is between $158 and $160.75, near the Ichimoku cloud's lowest level, Leading Span B.</li><li>A favorable entry <em>signal</em> would be a candle or sequence of candles reversing upward on strong momentum and high volume.</li></ul><h2>The Bottom Line</h2><p>So, what are we getting at? In the midst of a significant CPI-driven downturn tanking all three US indices, Walmart Inc. (WMT) was one of 37 notable outliers, with its stock price rising before succumbing to the market trend. The StockCharts' scan engine identified WMT in the predefined <em>New All-Time Highs</em> scan. There are many reasons to feel bullish about Walmart stock, but finding a favorable entry point takes a little nuancing. Hopefully, the layering of the indicators above can help you map out a basic entry strategy, particularly if you're bullish on WMT or looking to get in before or after its coming 3-for-1 split.</p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>By midday Tuesday, all three US indices had taken a massive plunge as a hotter-than-expected CPI inflation report left awash in red.What's interesting on days like this is running a New All-Time High scan (using StockCharts' scan engine) to see which stocks bucked the trend (even momentarily) amid such a significant downturn.The StockCharts Scan Engine is useful for narrowing down stocks and ETFs that match certain requirements. It comes with many predefined scans that are a good starting point. As you get the hang of these scans, you can adjust them or create new ones that align with your...The Costco Stock Surge: What You Need to Know Right Now!Karl Montevirgentag:stockcharts.com,2024-02-09:post-271892024-02-09T21:25:24Z2024-02-09T21:25:24Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/09/4f340dd9-7241-4265-8f93-5f5db39de8b6.jpg" style="display: block; margin: 0px auto;"></p><p>Costco (COST) stock has soared into uncharted heights, leaving its last all-time record in the dust. With a little under a month before the company is scheduled to open its earnings book, you'd think investors are expecting something of a blowout report, judging from the price action.</p><h2>Costco Outperforming the Broader Market and the Staples Sector</h2><p><img src="https://lh7-us.googleusercontent.com/FK0mrgmUxxHjXja5d6y8vHM-pkjDmrQg9KGoTTnWMweqgdmXP_CbO6j2ibn2pdQDOv8qren5eWdqcb7mqL_zlRth_g1TvjGbssKARbEBgselbSd2_en3jgaXvALu9w8Ro15fcosSIwHqhjvGDNd84-4"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF COST. Note COST's strong outperformance in technical ranking and relative to a few key benchmarks.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Costco's SCTR score crept up to 91, which it hasn't seen since 2022, when it last broke record-high territory. This indicates that several technical indicators are flashing a bullish signal, supported by the "full sail" position of its 50-week and 200-week <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_averages" target="_blank">simple moving average</a><span target="_blank"> (SMA). Strong bullish momentum? It sure appears so.</span></p><p>Plus, COST, on a longer-term scale, has outperformed the broader market ($SPX) and its sector, Consumer Staples, quite handsomely, clocking in a 69% and 77% gain over those respective benchmarks. As an aside, COST is among the several large cap stocks that came up on Thursday's <a href="https://stockcharts.com/freecharts/sample/scan-library.html" target="_blank">New All-Time Highs </a>scan, on a day when the big three indices barely budged.</p><p target="_blank"><em>But is there sufficient tailwind to maintain its skybound momentum?</em> One way to gauge this is to add an indicator, such as the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:money_flow_index_mfi" target="_blank">Money Flow Index (MFI)</a><span target="_blank">.</span></p><hr><h3 style="color:red;">Plotting the Money Flow Index on SharpCharts</h3><p>To add the MFI:</p><ul><li>From <strong>Your Dashboard,</strong> click on <strong>Charts & Tools </strong>at the top left navigation bar;</li><li><strong>SharpCharts </strong>is the top left selection; enter your ticker symbol there;</li><li>In the SharpCharts Workbench, select the <strong>Money Flow Index</strong> from the Indicators menu to view the indicator.</li></ul><p><img src="https://lh7-us.googleusercontent.com/QFnIyARc8K4sTwSWtarAkeze7foVkjdZWzmJqt6lYJF_vZJwXZxH2EsAVYUxmbvnvvPZfKbTnhZzFQaQb_bFd-JW_k4UrAnPg11nraNfxWaHrwFBct_4kkTARdoebmGhuG_eb5NjhqttRfr0jrMWGic"></p><hr><h2>What's Happening to the Tailwinds?</h2><p><img src="https://lh7-us.googleusercontent.com/6facrRlrw3bgBxa8fMLeg45roSZaAQzHCShjzs327DK9q-wI76VU7l_rb14Cc3bvfWNIERX9tWoUadIC1Z8ZfTNqjD3ZDFlP2zZwnUekbeo2qWxyNDiNhaHV3nWFlesYcZMJxhQfsNdvDOGT_MsKSNo"></p><p><span class="image-caption">CHART 2. DAILY CHART OF COST. Note that all points to continued bullishness except for the MFI, which started showing a decline in buying pressure in December.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><hr><p><img src="https://d.stockcharts.com/img/articles/2024/02/09/7e46b69a-37e8-4eac-8b85-587edb7a8afc.jpg" style="display: inline; margin: 0px 15px; float: left; width: 100px;"></p><p><strong>A quick recap:</strong> The Money Flow Index (MFI) is essentially a volume-weighted Relative Strength Index (RSI). When prices go up, more money flows in (buying pressure), and when prices go down, money flows out (selling pressure). The MFI is a momentum oscillator that uses volume and price movements to spot potential turning points and extreme price levels.</p><hr><p>You can see COST rising steadily with a slight pullback. Meanwhile, the 50-day, 100-day, and 200-day SMAs are fully extended, indicating a strong uptrend.</p><p>In contrast, however, the MFI is declining (see blue arrow) from its last "overbought" level in mid-December, as price continued to rise. This divergence indicates that prices are going up, despite buying pressure declining. In short, a pullback is due, and the most recent candle hints that the market may also be getting the message.</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/09/35b7a130-27ec-44de-b706-95e9e23e780c.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><p>Still, it's too early to confirm that this is the start of a pullback. Typically, Fibonacci retracement levels would be helpful in measuring the pullback and determining a few good long entry points, but this isn't possible just yet, as the pullback hasn't been confirmed.</p><p>So instead, if you're bullish on COST, <em>set a price alert at $675, its last swing low</em> (see blue horizontal line). A break below this level would likely mean prices are heading further down. And from there, you'll have several potential entry points:</p><ul><li>A pullback confirmed would be the green light to use StockCharts' Fib retracement tool, which can be used to identify an entry point;</li><li>Look at the 50-day or 100-day SMAs for a potential bounce (especially if any enter confluence with other market support levels); and/or</li><li>Set your sights at $640 (see red horizontal line), the next swing low, for a potential entry.</li></ul><h2>The Bottom Line</h2><p>The StockCharts' <strong>New All-Time High</strong> scan engine, coupled with the SCTR ranking, is a valuable tool for identifying strong stocks to trade. Of course, "all-time high" can often mean "too high" or overbought. Indicators like the MFI, among others, can help you understand whether there's enough momentum to support the stock's current trajectory or if it's due for a pullback. Oftentimes, stocks hitting a record high are due for a pullback, and that's where you select the technical tools to measure the pullback and identify potential entry points.</p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>Costco (COST) stock has soared into uncharted heights, leaving its last all-time record in the dust. With a little under a month before the company is scheduled to open its earnings book, you'd think investors are expecting something of a blowout report, judging from the price action.Costco Outperforming the Broader Market and the Staples SectorCHART 1. WEEKLY CHART OF COST. Note COST's strong outperformance in technical ranking and relative to a few key benchmarks.Chart source: StockCharts.com. For educational purposes.Costco's SCTR score crept up to 91, which it hasn't seen since 2022...Decoding PLTR Stock: Why It's an Attractive InvestmentJayanthi Gopalakrishnantag:stockcharts.com,2024-02-07:post-271772024-02-07T18:48:39Z2024-02-07T18:48:39Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/07/b1e53011-2c81-44b9-8cd9-de6fc8b3cf2d.jpg" style="display: block; margin: 0px auto;"></p><p>If you look at a chart of PLTR stock, you can see that it has had quite a ride, from its short-lived period of glory in 2021, when the stock price rallied from $10 to $45, to a slow decline to a low of $5.84. </p><p>Since April 2023, the stock has shown signs of life, with trading volume picking up and the stock price gradually rising. The main reason for this could be its involvement in the AI space. But PLTR's stock price also hit some headwinds when analysts became concerned about the slowing in growth from US government contracts.</p><h2>Impressive Earnings Send PLTR Stock Higher</h2><p>Palantir's Q4 earnings report, released Monday after the close, may be the catalyst for returning the stock to its previous highs. A large percentage of Palantir's growth came from commercial deals. Alex Karp, CEO of Palantir Technologies, emphasized the extraordinary performance of commercial deals—70% year-over-year growth—during the Q4 earnings call. Guidance was also positive.</p><p>On Tuesday, the stock experienced its best one-day gain ever, and it has continued to rise from there. Palantir was filtered in the <strong>New 52-week Highs</strong> scan in StockCharts. The weekly chart of PLTR paints a good picture of the stock price since its IPO in 2022. The stock has moved beyond its November high of $21.85 and faces little resistance before its September and November 2021 highs.</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/07/e2b464db-3a6f-42e6-8fe0-39bfb000f400.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF PLTR STOCK. The stock has broken above its last significant high and has little resistance before hitting its September and November 2021 highs. The SCTR score sits at 99.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Also, note the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:sctr" target="_blank">StockCharts Technical Rank</a><span target="_blank"> (SCTR) score of 99 (see top panel). Between May and November 2023, the SCTR score was around 99, but it dipped from there. It's now back at its highs, which makes it a stock worth following.</span></p><h2>Analyzing PLTR, Technically</h2><p target="_blank">When a stock gaps up after an earnings report, how do you know if it'll continue to trend? One way to help identify a trend is to add an indicator, such as the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:average_directional_index_adx" target="_blank">Average Directional Index</a><span target="_blank"> (ADX), to a chart (see top panel).</span></p><p target="_blank"><span target="_blank">In the daily chart of PLTR stock below, the ADX is at 17.62, below the 20 threshold most analysts use. Note that Welles Wilder, the creator of the indicator, preferred to use 25 as the threshold level. Whichever level you use, once the ADX crosses above the threshold level, it indicates a trend.</span></p><p><img src="https://d.stockcharts.com/img/articles/2024/02/07/94f4a5b3-b9c6-4bdb-a6e1-ab720595fcaf.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 2. DAILY CHART OF PLTR STOCK. Is the gap up in the stock's price the start of a trend? Monitor the ADX and relative strength index (RSI) to see if the momentum remains strong. If it does, the stock would be a worthwhile investment.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Since the ADX is trending higher, it may not be long before it hits the 20 level, especially if PLTR's stock price keeps rising. Remember that the momentum may be strong, as earnings results are still fresh in investors' minds. It tends to wane over time. </p><hr><p target="_blank"><em>To see other stocks filtered in the StockCharts </em><strong><em>52-week High</em></strong><em> scan, check out the </em><a href="https://stockcharts.com/freecharts/sample/scan-library.html" target="_blank"><em>Sample Scan Library</em></a><em target="_blank"> page.</em></p><hr><p>In addition to the ADX line, you could add the +DI and -DI lines to the indicator (select ADX Line (w/ +DI and -DI from the indicators list in the SharpCharts workbench). In the daily chart above, the +DI (green line) crossed above the -DI, which is considered a buy signal. This occurred a couple of days before the earnings report. If the +DI remains above -DI when the ADX line crosses above 20, it would be a favorable entry condition. A sell signal would be triggered when the -DI line crosses above the +DI line. You may also want to add a trailing stop if PLTR stock moves higher.</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/07/ae75a2c4-29ac-488f-bd28-d9d3df358740.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><p>The <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi" target="_blank">relative strength index</a><span target="_blank"> (RSI) is an indicator that can help identify a stock's momentum. The RSI is in overbought territory, but that doesn't necessarily mean the stock will sell off. A stock can remain in overbought territory for an extended period. If the stock continues to trend higher and its RSI remains overbought, it indicates that the momentum is still strong and investors are still interested in buying the stock.</span></p><h2>The Bottom Line</h2><p>PLTR's investment in AI data analytics, upbeat earnings, and positive guidance make it a stock to consider adding to your portfolio. Another positive for the company is its four consecutive quarters of positive GAAP earnings. This makes PLTR eligible to be added to the S&P 500. If this happens in 2024, it could be another catalyst that pushes the stock price higher. Most importantly, the stock trades below $30, making it an affordable AI play for many investors.</p><hr><p><strong><em>Disclaimer: </em></strong><em>This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>If you look at a chart of PLTR stock, you can see that it has had quite a ride, from its short-lived period of glory in 2021, when the stock price rallied from $10 to $45, to a slow decline to a low of $5.84. Since April 2023, the stock has shown signs of life, with trading volume picking up and the stock price gradually rising. The main reason for this could be its involvement in the AI space. But PLTR's stock price also hit some headwinds when analysts became concerned about the slowing in growth from US government contracts.Impressive Earnings Send PLTR Stock HigherPalantir's Q4...Eli Lilly's Volatile Victory: What Tuesday's Turnaround Means for Your PortfolioKarl Montevirgentag:stockcharts.com,2024-02-07:post-271732024-02-07T00:29:15Z2024-02-07T00:29:15Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/06/d13be1b8-2803-4596-b1a6-366860c674f6.jpg" style="display: block; margin: 0px auto;"></p><p>After topping Wall Street's earnings and revenue expectations on Tuesday, Eli Lilly & Co (LLY) shot up 5% from the prior day's close, only to see its gains evaporate mid-day.</p><p>A double hit that had some investors stunned, is it time to "overweight" the company whose rock star prospects rest on two of its most popular drugs, Zepbound <sup>™</sup> (for weight loss) and Mounjaro <sup>™</sup> (for type 2 diabetes)?</p><p>Eli Lilly's full 2024 guidance is right around Wall Street consensus, but it also forecasts that demand for a number of its drugs will outpace supply. So, despite its Tuesday gyrations, is LLY—which soared to an<em> all-time high</em>—a stock to buy now?</p><h2>Eli Lilly Stock: Rising Star, Shooting Star</h2><p><img src="https://lh7-us.googleusercontent.com/qooeW3utuDWxHRAhT2Zy9HQuR1Hpqq39KnrgalsNN_ElO_Zgtr0K3nAzPC54QEQ_H_8YlXbkPrlWFS-3iqJtdsKBza4xehrzeRjLOgHYwhhJORgBf5EBaPRCVOZ0Yz1OnSu7AhDjNSef7vhQTlLjnks"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF ELI LILLY STOCK PRICE. The big-picture technicals can sometimes serve as an early warning system not apparent in fundamental data.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Here's where fundamentals, which is largely bullish, and technicals, which show hints of skepticism, come to a head. Despite strong earnings and guidance, it's hard not to notice the following:</p><ul><li>A <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:candlestick_bearish_reversal_patterns" target="_blank">shooting star candlestick pattern</a>, which hints at a bearish reversal; look at that strong price rejection from the high!</li><li>Last week's <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:gaps_and_gap_analysis#:~:text=What%20Are%20Price%20Gaps%3F,up%20gaps%20and%20down%20gaps." target="_blank">price gap</a><span target="_blank">, which, according to Thomas Bulkowski's </span><em target="_blank">Encyclopedia of Chart Patterns,</em><span target="_blank"> has a 60% chance of getting filled </span><em target="_blank">if it's an exhaustion gap</em><span target="_blank"> versus an 8% chance of getting filled </span><em target="_blank">if it's a runaway gap</em><span target="_blank"> (of a larger trend that has yet to materialize).</span></li><li>The <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi" target="_blank">Relative Strength Index</a> (RSI) and <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow</a> (CMF) hint at a bearish price divergence, the CMF much more pronounced than the former based on the selling pressure below the zero line.</li></ul><p>This is a tough reading because LLY's fundamental prospects are mostly sunshine, with no shadows in sight, while the technicals are pretty much all shadows.</p><p><img src="https://lh7-us.googleusercontent.com/_Nv1SlRi5te6CGwTtDpsnVkMYeuL7JA8wGp-xNu1dhFimeDbNtj2ZACAvjFYlgRkT1Ralovcvt3oJY2Xi8Iaepo1dzNFkmsq5nBsDGL8-lUUSQdHaURpHTj-iTVKlNr8QDuzxeVN_alcFIbjkl6WRgA"></p><p><span class="image-caption">CHART 2. DAILY CHART OF ELI LILLY STOCK PRICE. There are multiple potential support levels and entry points. Layering several indicators can reveal a confluence of levels/ranges, which gives you a better chance of identifying critical entry levels.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>The following are a few things to consider:</p><ul><li>The <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">stochastic oscillator</a> is well within "overbought" territory, signaling that prices are a bit overvalued at its current level.</li><li>Price is well above the upper <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:bollinger_bands" target="_blank">Bollinger Band</a><sup>®</sup>; not only does 85% of price action happen within the upper and lower band, but price tends to revert to or near the middle band, even after a strong move (though it can remain above or below the middle band for an extended time).</li><li>The <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:ichimoku_cloud" target="_blank">Ichimoku Cloud</a> has been plotted for reference; the trend is bullish, but its support level is well below a few other critical levels, which may provide buying opportunities.</li></ul><p><img src="https://d.stockcharts.com/img/articles/2024/02/06/a4593660-c31e-420a-a72a-e384801e52bb.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><p>You can use the Fibonacci Retracement levels as a guide:</p><ul><li>The 32.8% retracement sits right below last week's price gap; it's likely to get filled, and if you're looking to scale in a long position, it would be the highest (and earliest) level to go long. You might set a price alert at $680, above this potential entry point.</li><li>The area between the 50% and 61.8% retracement ($650 and $630, respectively) is where the middle Bollinger band is located. This is probably your most favorable entry point for the bulk of your long position.</li><li>If price trades below $615, the most recent swing low and a level that's been (bullishly) rejected three times last month, then the current bullish thesis has to be re-evaluated; not that it's gone entirely, but the context and timing of the trade would have to be redrawn.</li></ul><hr><h3 style="color:red;">Set a Technical Price Alert</h3><p><a href="https://stockcharts.com/welcome/gs-alerts.html#:~:text=To%20access%20the%20Technical%20Alert,%22Your%20Price%20Alerts%22%20section." target="_blank">Setting a technical alert</a><span target="_blank"> at these support and resistance levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision. </span></p><p>To access the Technical Alert Workbench, follow these steps:</p><ul><li>Log in to your StockCharts account.</li><li>At the top of any page, click on <strong>Your Dashboard</strong>.</li><li>Click the <strong>Alerts</strong> or the <strong>New</strong> button in the <strong>Your Alerts</strong> panel.</li><li>Choose which type of alert you want to create from the <strong>Alert Type</strong> buttons at the top left. To create a price alert, select <strong>Price Alert</strong> as the alert type.</li><li>Add LLY in the symbol box and set your price trigger.</li><li>Choose how you wish to be notified, then click the <strong>Save Alert</strong> button.</li></ul><hr><h2>The Bottom Line</h2><p>LLY popped up in a StockCharts <strong>New All-Time High</strong> scan. The stock showcased a volatile turn after beating Wall Street's forecasts, pitting its strong fundamental outlook against the technical picture suggesting caution. Technical patterns like the (weekly) shooting star candlestick, bearish divergence, and the "overbought" conditions seen on the daily chart all signal an imminent pullback. Despite these bearish hints, strategic entry points identified through Fibonacci retracement levels could offer investors a balanced approach to leveraging Eli Lilly's fundamental strengths while navigating technical uncertainties.</p><hr><p><strong><em>Disclaimer: </em></strong><em>This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>After topping Wall Street's earnings and revenue expectations on Tuesday, Eli Lilly & Co (LLY) shot up 5% from the prior day's close, only to see its gains evaporate mid-day.A double hit that had some investors stunned, is it time to "overweight" the company whose rock star prospects rest on two of its most popular drugs, Zepbound ™ (for weight loss) and Mounjaro ™ (for type 2 diabetes)?Eli Lilly's full 2024 guidance is right around Wall Street consensus, but it also forecasts that demand for a number of its drugs will outpace supply. So, despite its Tuesday gyrations, is LLY—which...Based on Relative Strength, Alphabet (GOOGL) Is An Unloved StockTom Bowleytag:stockcharts.com,2024-02-04:post-271662024-02-04T21:00:00Z2024-02-04T21:00:00Z<p>Nearly two weeks ago, I was discussing in our <a href="https://www.earningsbeats.com/public/subscribe.cfm?ref=tp" target="_blank">FREE EB Digest newsletter</a> why I felt Alphabet (GOOGL) was poised for a decline after earnings. It was continuing to push higher, which, on the surface, was a fairly bullish signal. However, if you looked at how strong internet stocks ($DJUSNS) were performing as a whole, then it became rather obvious that the big Wall Street firms weren't overly impressed with GOOGL as it head towards its quarterly earnings release. Check out the bottom two panels - the first showing GOOGL:$DJUSNS relative strength and then the second showing the relative strength of Meta Platforms (META) vs. the internet group (META:$DJUSNS):</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/04/aead3292-c40d-4f1d-ada1-6fb5393f17ba.jpg" onclick="window.open('https://stockcharts.com/h-sc/ui?s=GOOGL&p=D&yr=1&mn=6&dy=0&i=p30701048712&a=1595999836')" style="display: block; margin: 0px auto;"></p><p>In our January 26th EB Digest newsletter article, I featured the above trading range (139-144) as a possible landing area for GOOGL after earnings. Heading into its earnings, GOOGL was overbought and was a SIGNIFICANT relative under performer. It's pretty obvious to me that META was <strong><em>leading</em></strong> the internet group, while GOOGL was <strong><em>the beneficiary of being in a strong group. </em></strong>GOOGL's recent weakness did, however, send the stock down into that 139-144 trading range and GOOGL is now testing a longer-term uptrend line. While I'd expect a price bounce from here, it's really relative strength that I'll be watching.</p><p>The more leading stocks in leading industry groups that we own, the better our portfolios are likely to perform.</p><p>In our Monday morning FREE EB Digest newsletter, I'll be featuring a stock that is setting up potentially for a BIG move higher - at least based on the way it's been trading, relative to its peer group. You can <a href="https://www.earningsbeats.com/public/subscribe.cfm?ref=tp" target="_blank">REGISTER</a> for our FREE newsletter with your name and email address. There is no credit card required and you may unsubscribe at any time.</p><p>Happy trading!</p><p>Tom</p>Nearly two weeks ago, I was discussing in our FREE EB Digest newsletter why I felt Alphabet (GOOGL) was poised for a decline after earnings. It was continuing to push higher, which, on the surface, was a fairly bullish signal. However, if you looked at how strong internet stocks ($DJUSNS) were performing as a whole, then it became rather obvious that the big Wall Street firms weren't overly impressed with GOOGL as it head towards its quarterly earnings release. Check out the bottom two panels - the first showing GOOGL:$DJUSNS relative strength and then the second showing the relative...Deciphering Gold's (GLD) Signals: Is Now the Time to Go Long on Gold?Karl Montevirgentag:stockcharts.com,2024-02-02:post-271552024-02-02T22:40:08Z2024-02-02T22:20:29Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/02/b7aa080a-9b20-49a1-b8d2-65eacab8d84a.jpg" style="display: block; margin: 0px auto;"></p><p>The gold market saw a significant sell-off Friday morning, as unexpectedly strong job market data undermined investor hopes for imminent Federal Reserve rate cuts anytime soon. Of course, market conditions can change rapidly, and analysts' wide scattershot opinions on gold price targets in 2024 reflect this reality.</p><p>So far, the SPDR Gold Shares ETF (GLD), a proxy for the yellow metal, had a volatile run since bottoming out in October, but its uptrend remains intact. This is mainly due to its series of higher lows. But if you look at the highs, its momentum seems to have been stalling over the last three months, unable to close above its December high of $193.18. However, if you take a longer-term view, that resistance level (or "range") has held over the last four years.</p><h2>Gold Prices Failing Four Times in Four Years!</h2><p><img src="https://lh7-us.googleusercontent.com/APnd--TF5yuTTd-pC6uF9W3sgoRDj0gBnrqw15Do833atU-IshMT9lhzE-wPFW76_6X6MxGjkpV5zzei27xGDKVcMZnUk54Je3KIzFwQTaQwiv_beCDmsAdi_h7vz0ja55dCfWfgPaJ-SzdeRNpHjsU"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF SPDR GOLD SHARES (GLD). Price has tried and failed to break above 195 over the last four years.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Analyst price targets for GLD in 2024 vary, ranging from between the low 180s to soaring past the $200 mark per share. Pinning down where it'll land is as murky as predicting the Fed's next move on slashing interest rates or forecasting when the BRICS might shake the US dollar from its global throne. But let's take a closer look at the near-term price action.</p><h2>Gold (GLD) Price Today</h2><p><img src="https://lh7-us.googleusercontent.com/SOgA5954pUeYBfiXgMr8_owOk7qI1tYYueC471IG_uIISh2HeUVMxKfkNoWEkb-QbK-s0tmt3VEoqUwwhLDjieAzoN7BC9nxZmRC-4In4A-DIisDT1aJkyiuYkHjiTRhHKaBGtwvYa_Hgzx7qYP8Qdo"></p><p><span class="image-caption">CHART 2. DAILY CHART OF GLD. In a volatile and convoluted price environment, it helps to use volume, as well as support and resistance along with other indicators, to identify potential zones of "confluence" in a market's structure.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>GLD's failure to challenge the November and December highs indicates that its uptrend may have shifted to a range-bound dynamic.</p><ul><li>When GLD bottomed out in October, note the significant shift from selling pressure to buying pressure on the Chaikin Money Flow.</li><li>Peaking in mid-October, buying pressure has been steadily declining and is now in the negative, indicating that there may not be enough momentum to challenge, let alone close above, the November and December highs.</li></ul><h2>What You Should Look Out For if You're Bullish on GLD</h2><p>If you're bullish on GLD, and if the pullback thesis is correct, what should you look out for?</p><ul><li>Note the largest bar on the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:volume_by_price#:~:text=Volume%2Dby%2DPrice%20is%20an,correspond%20with%20these%20price%20ranges" target="_blank">Volume-by-Price</a><span target="_blank"> indicator, which tells you that a large amount of trading occurred between $182.50 and $184.50.</span></li><li>You can use this level to anticipate potential support, and you might want to set a price alert at $184.50 to alert you when the price has entered this range.</li><li>The Volume-by-Price bar also coincides with May, June, and November resistance levels (see highest blue dotted line), the December swing low (see lower blue dotted line), and the 100-day <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_averages" target="_blank">simple moving average</a><span target="_blank">.</span></li><li>You want the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">Stochastic Oscillator</a><span target="_blank"> to get near or fall under the 20 line, signaling an oversold condition.</span></li><li>Most importantly, you want to see a strong bounce upward with relatively high momentum and a CMF reading above the zero line before entering a long position.</li></ul><h2>Seasonality Warning</h2><p>Seasonality is more of a contextualizing tool than a predictive tool. However, the historical consistency of the context can sometimes be predictive. If you're wondering how GLD might perform relative to the broader market, the seasonal picture gives a warning.</p><p><img src="https://lh7-us.googleusercontent.com/BsjRgU9k3kIlZKJhpGYYnHIZKpPOVy4eRDdr24euVHBnYdaEmsIYTF7s7Aychb5KVJrnjl47kOy1yXYbvDlKDjwAPqmxUmJ0g7nfaK362uHGXLHtN1R6MxXQru9QrmwpYRqiBvjlT9rbFh03CT38KEA"></p><p><span class="image-caption">CHART 3. 10-YEAR SEASONAL PERFORMANCE OF GOLD VS S&P 500. For context's sake, note that GLD is entering into its weakest season months.</span></p><p>In short, GLD's strongest months, December and January, have passed. Look at the numbers at the bottom of the bars to see the 10-year average return of gold against the S&P 500 ($SPX). We're heading into a series of weak months, seasonally speaking. But again, this is context, not prediction. And given the volatile geopolitical situation, the conditions influencing gold prices can change on a dime.</p><hr><h3 style="color:red;">How To Set a Technical Price Alert</h3><p><a href="https://stockcharts.com/welcome/gs-alerts.html#:~:text=To%20access%20the%20Technical%20Alert,%22Your%20Price%20Alerts%22%20section." target="_blank">Setting a technical alert</a><span target="_blank"> at these support and resistance levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision.</span></p><p>To access the Technical Alert Workbench, follow these steps:</p><ul><li>Log in to your StockCharts account.</li><li>At the top of any page, click on <strong>Your Dashboard</strong>.</li><li>Click the <strong>Alerts</strong> or the <strong>New</strong> button in the <strong>Your Alerts</strong> panel.</li><li>Choose which type of alert you want to create from the <strong>Alert Type</strong> buttons at the top left. To create a price alert, select <strong>Price Alert</strong> as the alert type.</li><li>Add GLD in the symbol box and set your price trigger.</li><li>Choose how you wish to be notified and click the <strong>Save Alert</strong> button.</li></ul><hr><h2>The Bottom Line</h2><p>Friday's gold market nosedive, thanks to unexpectedly strong job data, dampened hopes for Fed rate cuts. Analysts have no clear consensus regarding price targets, as their predictions vary significantly. However, technical indicators can provide valuable insights in such situations. The Volume-by-Price indicator, alongside other indicators, suggests a reasonable means of locating potential support, which can be helpful to those looking to go long. However, it's crucial to consider the global context, as the monetary value and worldwide trading of gold can have long-term implications for its price.</p><hr><p><img src="https://d.stockcharts.com/img/articles/2024/02/02/921fea5f-c0a7-49b0-bd23-81bfe31c4709.jpg" style="display: block; margin: 0px auto;" onclick="window.open('https://stockcharts.com/')"></p><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>The gold market saw a significant sell-off Friday morning, as unexpectedly strong job market data undermined investor hopes for imminent Federal Reserve rate cuts anytime soon. Of course, market conditions can change rapidly, and analysts' wide scattershot opinions on gold price targets in 2024 reflect this reality.So far, the SPDR Gold Shares ETF (GLD), a proxy for the yellow metal, had a volatile run since bottoming out in October, but its uptrend remains intact. This is mainly due to its series of higher lows. But if you look at the highs, its momentum seems to have been stalling...DR Horton Stock Plummets: Is Now the Time to Buy the Dip?Karl Montevirgentag:stockcharts.com,2024-02-01:post-271492024-02-01T22:31:42Z2024-02-01T22:31:42Z<p><img src="https://d.stockcharts.com/img/articles/2024/02/01/fa4a1c57-98b1-41af-bdb9-d82e307eadb0.jpg" style="display: inline; margin: 0px 15px; float: left; width: 600px;"></p><p>The tight supply environment in the housing market largely fueled DR Horton's (DHI) strong year-and-a-half run. Last week, DHI's earnings took a hit, missing the mark on Wall Street's profit expectations (though it managed to beat on revenue), in addition to signaling softer quarters ahead.</p><p>DHI's stock dropped from its all-time high of $157.93 to a low of $138.83 before recovering. But is it a buyable dip? Or is it a falling knife waiting to snare the unwary? Let's look at DHI stock's daily chart to find out (see below).</p><p><img src="https://lh7-us.googleusercontent.com/aS9hd_hPEB9gYevgMVv2vTRKSEaEn56E3tMxEX7rqJSppv1Di_6VcsM9tJeeG5_yrUfMtDuTB15ohcV1TO7f2FoEDg8ATRxyw2QevfV2H653euVz8gtk8-5zsmpZ7HvNlNYz0Ij8Y2fX5ivNJj8ZIG8"></p><p><span class="image-caption">CHART 1. DAILY CHART OF DR HORTON. Buyers jumped in as soon price began consolidating below the 50-day SMA line.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>The story here is pretty clear:</p><ul><li>DHI fell below the 50-day <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:moving_averages" target="_blank">simple moving average</a> (SMA), and buyers jumped in, assuming the dip was sufficient to signal a buy.</li><li>The <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">Stochastic Oscillator</a> is one indicator that confirms the "oversold" thesis.</li><li>Plus, the 50-day and 200-day SMA are trending upward, with the 50 well above the 200. Both are signaling bullishness.</li></ul><p>While this makes for a reasonable "buy-the-dip" thesis, it could use plenty of fine-tuning by filtering it across different, yet complementary indicators.</p><hr><p><img src="https://d.stockcharts.com/img/articles/2024/02/01/201c997c-75f1-439e-9d75-99f84497c2b7.jpg" style="display: inline; margin: 0px 15px; float: left;"></p><p><strong>Helpful Charting Tip</strong></p><p>DHI was filtered in the StockCharts' <strong>Entered Ichimoku Cloud</strong> scan, an excellent way to find potential "buy the dip" stocks. Check it against the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:sctr" target="_blank">StockCharts Technical Rankings (SCTR)</a><span target="_blank"> score (and, of course, the chart itself) to see if it's a tradable prospect.</span></p><hr><p><img src="https://lh7-us.googleusercontent.com/Hb1KTF5gtZmtYAXIBPFk4E6kDZTEx6-GhchWtnxXYO8tLOIZ1bsRt_JxCHUk1aUUfZuXOU1-VB9jXW-STiaUhqCKc8MeFXfWi4rFcOBKh2sFMpBI3tOY3Mt8WrVJiQHGIMqKJeve0sP5sswTghMVXIA"></p><p><span class="image-caption">CHART 2. DAILY CHART OF DR HORTON WITH ICHIMOKU CLOUD AND CHAIKIN MONEY FLOW. Adding more indicators to measure the pullback and momentum can give you different angles to understanding the "buy the dip" scenario.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Compare the above chart to Chart 1 and decide whether an entry on the buy side might have been premature.</p><ul><li>Countering the "oversold" reading on the Stochastic Oscillator, the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow</a><span target="_blank"> shows a dramatic decline in buying momentum.</span></li><li>The Ichimoku Cloud indicates a bullish condition, yet gives the stock a much wider range of support than, say, the 50-day SMA; still, it helps to pinpoint a more specific entry level.</li><li>The purple line marks a resistance level likely to serve as support.</li><li>That potential support level also sits right above the Fibonacci 50% retracement line, which, in turn, sits right above the lowest level of the cloud.</li></ul><p>But are there other technical reasons to support the case that DHI might have more downside to run before reversing upward? The answer is yes if you look at DHI from a seasonality context.</p><p><img src="https://lh7-us.googleusercontent.com/fcRNggCi2kTd_cDpmlb2esMLutBdQ6abxJ4Xn_YOeQ_ydieGZUbKnabKUxHwKTVhWRSA7FTJys6OrLie3JfYTd0omTpNFWpabSapAmR09n1z6iXjM1lznc_NO3DclI8CuomXUMJ6DYMSzb9JveTyQZI"></p><p><span class="image-caption">CHART 3. 10-YEAR SEASONALITY CHART FOR DHI. April, July, and November are DHI's strongest months.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>DHI's 10-year seasonal performance shows that February is a weak month for the stock. While March has a strong higher close rate (78%), its average 10-year return is 0.6%. April, however, has an above-average higher-close rate and a strong average seasonal return of 5.6%. The strongest months are July (with a 100% higher close rate and 8.5% average return) and November (89% higher closes and 9.7% average return).</p><p>But how might DHI's performance compare with the S&P 500's seasonal performance?</p><p><img src="https://lh7-us.googleusercontent.com/toVwBjS7_9-d2TWTyYNyrY_oYSJZ_Skx-wn1Tt8HaaCM9ziLGxYUs-_aFQ-jvp0ynIt2Z-NG8hImM7MIQBxFrHoCtA4pXwgpcs-Iceyrepq1vUIDX79NJ9asPOMhbjt4hjhbPJjcA5MM2b2mStlWY34"></p><p><span class="image-caption">CHART 4. 10-YEAR SEASONAL PERFORMANCE OF DHI VS THE S&P 500. Though the numbers may vary against the broader market, DHI's strong months remain consistent.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>The performance, though slightly varied, still reflects the same scenario: February is a weak month, while April shows strength, and July and November are the strongest months.</p><h2>The Bottom Line</h2><p>Considering DHI's 10-year seasonal performance, by itself and against the broader market, suggests that its current dip isn't quite over yet. The CMF shows a decline in buying pressure and doesn't indicate significant bullish momentum. Adding the Ichimoku Cloud, Fib retracements, and simple support and resistance to the mix can help traders identify favorable entry points. So, it's a matter of waiting. But the context for a trade setup is well in place.</p><p><img src="https://d.stockcharts.com/img/articles/2024/02/01/16c4ff73-5245-4cb2-b4bb-e71a57c7342a.jpg" style="display: block; margin: 0px auto;" onclick="window.open('https://stockcharts.com/')"></p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>The tight supply environment in the housing market largely fueled DR Horton's (DHI) strong year-and-a-half run. Last week, DHI's earnings took a hit, missing the mark on Wall Street's profit expectations (though it managed to beat on revenue), in addition to signaling softer quarters ahead.DHI's stock dropped from its all-time high of $157.93 to a low of $138.83 before recovering. But is it a buyable dip? Or is it a falling knife waiting to snare the unwary? Let's look at DHI stock's daily chart to find out (see below).CHART 1. DAILY CHART OF DR HORTON. Buyers jumped in as soon price began...IBM Stock Shatters Expectations, Hitting a New All-Time High: A Buying Opportunity?Karl Montevirgentag:stockcharts.com,2024-01-26:post-271122024-01-26T19:58:49Z2024-01-26T19:58:49Z<p><img src="https://d.stockcharts.com/img/articles/2024/01/26/3b3ea018-5658-4747-8997-a490a7988130.jpg" style="display: block; margin: 0px auto;"></p><p>As a trailblazer in the tech industry, IBM stands out as an "OG'' among corporate tech giants. Yet the company is far from turning into a relic. It continues to make significant progress distinct from its more progressive rivals.</p><p>IBM may not be the hippest among the tech bunch nor the most progressive (certainly not an AI play). Yet its strategy—focusing on providing software and services to corporate clients—has paid off, which makes it an attractive tech stock. Last week, IBM hit a new all-time high after reporting stellar earnings this past week. The stock broke above a rising multi-year trend channel (on a weekly chart scale) and spiked well above its upper <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:bollinger_bands" target="_blank">Bollinger Band®</a><span target="_blank"> on the daily chart.</span></p><p>Let's look at the five-year weekly chart of IBM's stock price (see chart below).</p><p><img src="https://lh7-us.googleusercontent.com/6TmzlRmL31FPp4kP_CTZ_XvbMRaDcdttXJTcYn0VRvLjs51rGtOWmvlch25GdnzRjnz1sOPLwUwWWZ1PCdJ2htc-QaSEWKDh0l-OyGre358en98yMGXfuQCVFCuQHdq58ttcADftbFCMuKKKBifRpeI"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF IBM STOCK. The stock traded within a wide trending channel for four years before breaking out.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>On the left side of the screen, you'll see that prices were already rising within a narrow channel prior to plunging during the COVID Crash of 2020. As IBM recovered, it began trending upward again, but this time within a much wider channel, roughly twice the size of the previous (2019) one. Within these five years, IBM has been trading upward, but at a volatile and slow pace.</p><p>But then things started to change in the latter part of 2023. IBM's stock price moved above the longer-trend channel and into the ultra-bullish and parabolic move, culminating in this week's 13% spike. Note, however, that the longer-term divergence between prices and buying pressure as measured by the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf" target="_blank">Chaikin Money Flow</a><span target="_blank"> (lower panel).</span></p><p>As in most cases, bullish momentum on parabolic moves such as this one can't be sustained, but the overall uptrend can, given a significant "breather" or pullback. So, if you're considering entering a position in IBM, it's worth exploring where this pullback might lead the stock.</p><p>Let's take a look at the daily chart.</p><p><img src="https://lh7-us.googleusercontent.com/I2sjQWlHDuQ2YnPHj4qygXHCBHWwgjWnwD6Hevkq863of_yE_wPPijN6WF_8ptxtbhc5toJl58Ajudaf_OnIlSdDBBOzzleaIaklPAB1wrDDelJL0KIeKiEYZ92BSv8XNsy1aF4funHryJcv51eEF0s"></p><p><span class="image-caption">CHART 2. DAILY CHART OF IBM. The stock price goes parabolic, but the CMF is declining, and there's a price rejection from IBM's all-time high.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p target="_blank">After a three-month basing period from February to May last year, IBM resumed its uptrend, pulling back again in September, only to shift gears on a bullish <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:gaps_and_gap_analysis" target="_blank">breakaway gap</a><span target="_blank"> at the end of October.</span></p><p><img src="https://d.stockcharts.com/img/articles/2024/01/26/a4b92440-ed9b-46de-a25e-753fa935c7a8.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><ul><li>IBM closed above the upper Bollinger Band on January 12 and kept riding that line until January 24, when it was slated to report earnings after the close.</li><li>The stock gapped up to open on January 25 following a stellar earnings report.</li><li>Though IBM closed higher and above the upper band, note the significant price rejection from the high of 196.9.</li><li>In addition to the RSI placing IBM's price in overbought territory, note the decline in buying pressure measured by the CMF; both suggest that a pullback is more or less imminent.</li></ul><p>So, when might be a favorable time to start loading up on IBM shares? It might be tempting to think it's too late to invest when a stock reaches a new peak. However, it's important to remember that stocks' value fluctuates, especially when the surge is this steep. So, it's best to exercise patience and wait for a pullback, as those pullbacks present favorable entry opportunities.</p><h2>Bottom Line: Keep Your FOMO in Check</h2><p>Checking out IBM's stock chart, you'll notice moments in its uptrend where the price dipped back to the middle Bollinger band before bouncing back up. Also, price fluctuations occur within the Bollinger band 95% of the time, suggesting that IBM's current high is a 5% outlier and bound to fall back toward the middle band. This will likely happen; you might want to give it a few days.</p><p target="_blank">Also, you might want to set a price alert at around $182.50, which is the middle of IBM's <a href="https://school.stockcharts.com/doku.php?id=chart_analysis:gaps_and_gap_analysis" target="_blank">runaway gap</a><span target="_blank">. Gaps tend to get filled. While that level may still be too high a price level to go long, setting an alert will at least tell you when to begin closely monitoring the stock. You could wait for IBM's stock price to fall toward the middle band and wit for a bounce with strong momentum before entering a long position.</span></p><hr><h3 style="color:red;">How To Set a Technical Price Alert</h3><p><a href="https://stockcharts.com/welcome/gs-alerts.html#:~:text=To%20access%20the%20Technical%20Alert,%22Your%20Price%20Alerts%22%20section." target="_blank">Setting a technical alert</a><span target="_blank"> at these support and resistance levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision.</span></p><p>To access the Technical Alert Workbench, follow these steps:</p><ul><li>Log in to your StockCharts account.</li><li>At the top of any page, click on <strong>Your Dashboard</strong>.</li><li>Click the <strong>Alerts</strong> or the <strong>New</strong> button in the <strong>Your Alerts</strong> panel.</li><li>Choose which type of alert you want to create from the <strong>Alert Type</strong> buttons at the top left. To create a price alert, select <strong>Price Alert</strong> as the alert type.</li><li>Add IBM in the symbol box and set your price trigger.</li><li>Choose how you wish to be notified and click the <strong>Save Alert</strong> button.</li></ul><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>As a trailblazer in the tech industry, IBM stands out as an "OG'' among corporate tech giants. Yet the company is far from turning into a relic. It continues to make significant progress distinct from its more progressive rivals.IBM may not be the hippest among the tech bunch nor the most progressive (certainly not an AI play). Yet its strategy—focusing on providing software and services to corporate clients—has paid off, which makes it an attractive tech stock. Last week, IBM hit a new all-time high after reporting stellar earnings this past week. The stock broke above a rising multi-year...SEC Greenlights Bitcoin ETFs: How This Major Move Could Skyrocket Coinbase Stock PriceKarl Montevirgentag:stockcharts.com,2024-01-25:post-271072024-01-25T19:59:16Z2024-01-25T19:59:16Z<p><img src="https://d.stockcharts.com/img/articles/2024/01/25/70300f69-b709-4ab0-bdd3-3fbeaa140aca.jpg" style="display: inline; margin: 0px 15px; float: left; width: 550px;"></p><p>Are you feeling a bit of FOMO seeing how the SEC's approval boosted crypto and other crypto-related assets? Well, don't. There might be an opportunity for a bullish trade with the largest cryptocurrency exchange in the US: Coinbase (COIN).</p><p>Coinbase's stock is correlated to Bitcoin and it's likely to benefit from this new regulatory development. Coinbase is in a downswing, but it's worth adding the chart to your ChartList and watch for it to land and reverse.</p><h2>Finding COIN Through a StockCharts Ichimoku Scan </h2><p>The good news is that Coinbase was one of the stocks filtered in the <a href="https://support.stockcharts.com/doku.php?id=scans" target="_blank">StockCharts scan</a><span target="_blank"> </span><strong target="_blank">Entered Ichimoku Cloud</strong><span target="_blank"> on Wednesday.</span></p><p>Why this particular scan? Because entering the cloud already pimples a pullback, and it allows you to see the projected bullishness of the price through the color and thickness of the cloud under the prevailing price and projected 26 periods ahead.</p><p><img src="https://lh7-us.googleusercontent.com/owyjYdFpworNK3ctu3u88Zy8agI8k5BA3aq5wStiFhMg1K2HTscMNPv0JrbkIjSu9g-y-5rAqsi6KEYQkcbjGXVA-zTppZMSKI0faG7AluZtsaP0FSndwPMLidhNzupL8RVIdMBaT4jTSkcU6pJDMbQ"></p><p>COIN presented an intriguing possibility in light of the SEC's recent actions. Let's analyze the stock's technical environment.</p><h2>COIN: The Technical Scenario</h2><p>If you're bullish on crypto and looking to invest in the exchange, start with a birds-eye view of COIN's price action before drilling down to specific entry points.</p><p>The chart below shows COIN's price trajectory since its IPO launch in April 2021. Note its relatively close correlation to Bitcoin ($BTC), represented by the black line on the chart.</p><p><img src="https://lh7-us.googleusercontent.com/ZFihxS9u7zPp8WPsoy63l3gYQYdG644MWYFntaSTyLmXU_uSQvsOU6p4tj3q7sMRrbmxroh-Xwgrhl1KchUFUjiDGgEvWreYcIEcmjQnsLAqd3sU-E4sNIvuSSuXACrAlmlgCoTGackECpOtgAbIXTc"></p><p><span class="image-caption">CHART 1. WEEKLY CHART OF COIN. Notice how closely COIN's price follows Bitcoin's ($BTCUSD) movements.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>The above chart captures COIN's price action from its IPO launch. Note the blue horizontal line connecting the highs of August 2022 and July 2023. These highs and the series of swing lows throughout 2022 and 2023 marked a wide and long-term trading range that COIN couldn't break above until November 2023.</p><p>But while this trading range appeared <em>relatively</em> static, lacking strong upward momentum, the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:chaikin_money_flow_cmf&gad_source=1&gclid=Cj0KCQiAh8OtBhCQARIsAIkWb6-hyeVijsjOvW7yB9krBqab47lZBGU7nRwABoIe9R-5FHeP0yYBhoEaAoxVEALw_wcB" target="_blank">Chaikin Money Flow (CMF)</a><span target="_blank">, in contrast, rose dramatically (see red arrow tracing the upward path of the CMF levels). As you know, CMF measures buying/selling pressure of a stock. And in this case, the shift from heavy selling to increased buying indicated a bullish shift that wasn't as pronounced in the price chart alone.</span></p><p>Those who were looking at the longer-term weekly chart might have anticipated the possibility (then) that COIN potentially bottomed at the beginning of 2023, as the CMF finally crossed the zero line into positive territory.</p><p>Currently, COIN is in a downswing, but support may be found at the previous resistance level that marked its November breakout. But to get a clearer picture, let's look at the daily chart to drill down further and find an entry point.</p><p>The daily chart below includes the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">Stochastic Oscillator</a><span target="_blank"> in the lower panel. The oscillator indicates that the price is at the oversold level. As the scan indicates, COIN has entered the Ichimoku Cloud, which often serves as a support (or in bearish cases, resistance).</span></p><p><img src="https://lh7-us.googleusercontent.com/keLrGxSz2Eli7ayhU67Khz0uDEzFLljILuseVxB_NUhSE3Ollwcq53fHMFeDDXn8VMTtZtmwsXtszwlTOCpOj9Iluf9OUuF8_16FUVhnMUVhe9hUk5MXQSXPs3hOwtY0PAoQHzEh80eGEKj4PxW31QM"></p><p><span class="image-caption">CHART 2. DAILY CHART OF COIN. The Fib Retracement, Cloud, and Stochastic Oscillator give a green light for a "long" entry.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>What's important is the larger context surrounding the price's entry into the kumo (Ichimoku cloud). On a weekly scale, there is an increase in buying pressure, as measured by the CMF supporting COIN's longer-term uptrend. The cloud color is green, and its range has more or less thickened as projected 26 periods from the current day.</p><p><img src="https://d.stockcharts.com/img/articles/2024/01/25/813de3af-65ea-4644-9fc2-37726472a4ed.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><p target="_blank"><span target="_blank">To fine-tune the pullback's measure, note the Fibonacci retracement levels from October 2023 to the December high.</span></p><p>Bullish traders might find the favorable <em>range</em> of entry now, but, as far as pinpointing an ideal entry <em>point,</em> you'd want to see a strong reversal candle in the next few sessions before committing to a long position. Assuming that your entry point is at or above $115.05, which is where the 61.8% Fib retracement level is located, you'd want to place a stop loss below $115, which is also the lower end of the (rising) cloud.</p><h2>The Bottom Line</h2><p>The landscape for Coinbase (COIN) looks promising from the fundamental and regulatory end, considering the SEC's approval for multiple Bitcoin ETFs. Technically, every indicator applied to the chart gives a clear bullish green light on an entry. Of course, it's important to enter any position cautiously, as several factors can change the market dynamics and investor sentiment.</p><p><strong>Final thoughts: </strong>Scans are important. In addition to the Ichimoku scan, hundreds of other scans are available in StockCharts. Try them out and see which ones align with your investment goals. Predefined scans are a good starting point, but you can <a href="https://support.stockcharts.com/doku.php?id=scans:tutorials" target="_blank">also create your scans</a>.</p><hr><h3>How To Run an Ichimoku Scan (or any technical scan)</h3><ul><li>Log in to your StockCharts account</li><li>Go to <strong>Your Dashboard</strong> and, in the Member Tools window, scroll down to Reports & More and click on <strong>Sample Scan Library</strong>.</li><li>The Ichimoku Patterns are in the Candlestick Patterns section. Click the <strong>Run</strong> button next to the scan (in this case, Entered Ichimoku Cloud) and you'll see a list of the filtered stocks and ETFs.</li></ul><p><img src="https://lh7-us.googleusercontent.com/SsAnwxSvE-RktYRQo46-BmfVgm7fnPOXh9-5C4hTJmB9MJPh-IwFTtD8hdu6Qq_Tofttm3TjXLXxbTvNP1tsEabmVT6zc-Xrvn-1fHpaUMVErykUHUEs0yM2QJ3n-8L3gYDLnf67jpEqo0mpeh-Oaow"></p><hr><p><strong><em>Disclaimer:</em></strong><em> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>Are you feeling a bit of FOMO seeing how the SEC's approval boosted crypto and other crypto-related assets? Well, don't. There might be an opportunity for a bullish trade with the largest cryptocurrency exchange in the US: Coinbase (COIN).Coinbase's stock is correlated to Bitcoin and it's likely to benefit from this new regulatory development. Coinbase is in a downswing, but it's worth adding the chart to your ChartList and watch for it to land and reverse.Finding COIN Through a StockCharts Ichimoku Scan The good news is that Coinbase was one of the stocks filtered in the StockCharts...AMD Stock Hits New 52-Week High: A Buying Opportunity?Jayanthi Gopalakrishnantag:stockcharts.com,2024-01-24:post-271002024-01-24T20:44:54Z2024-01-24T20:44:54Z<p><img src="https://d.stockcharts.com/img/articles/2024/01/24/c0894b16-59f7-4cd2-a055-a4dcc54a75b9.jpg" style="display: block; margin: 0px auto;"></p><p>Advanced Micro Devices, Inc. (stock symbol: AMD) is one stock that met several positive trading criteria during Wednesday's trading. The stock price hit a new 52-week high and moved above its upper Bollinger Band<sup>®</sup>, its upper price channel, and so on.</p><p>The AMD chart below displays a Bollinger Band overlay and the Distance From 52-Week High indicator in the lower panel (available in StockChartsACP).</p><p><img src="https://d.stockcharts.com/img/articles/2024/01/24/41fe2460-a413-4f2c-b01b-4e9e8d7c5987.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 1. AMD STOCK RISES TO NEW 52-WEEK HIGH. The stock price has moved above its upper Bollinger Band and has hit a new 52-week high. How much higher can the stock move?</span><em><span class="image-caption">Chart source: StockChartsACP. For educational purposes.</span></em></p><h2>Scanning the Stock Universe</h2><p>Identifying stocks and exchange-traded funds (ETFs) to invest or trade can be difficult. But, with a little effort, you can develop a method that gives you an acceptable return more often than not.</p><p>The good news is that the learning curve isn't steep. All you need to do is follow these steps:</p><ol><li> Create a few different scan criteria.</li><li> Regularly run the scans.</li><li> Analyze the filtered stocks or ETFs.</li><li> Make your entry and exit decisions.</li></ol><p>The <a href="https://support.stockcharts.com/doku.php?id=scans" target="_blank">StockCharts Scan Engine</a><span target="_blank"> can help you filter out stocks and ETFs that meet specific criteria. There are </span><a href="https://stockcharts.com/def/servlet/SC.scan" target="_blank">several predefined scans</a><span target="_blank"> which are great to start from, but, once you become familiar with the scans, you can tweak them or come up with one compatible with your investment objectives.</span></p><p>For example, when the broader market indexes are hitting new highs, you may want to run the New All-Time Highs, New 52-Week Highs, or any of the scans in the New Highs category.</p><p><img src="https://d.stockcharts.com/img/articles/2024/01/24/697f5efc-0f2e-40e5-8870-c2e424415cff.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 2. THE STOCKCHARTS SCAN ENGINE. There are several predefined scans to choose from. Here, you can see the New Highs and New Lows scans.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Scanning can do more than identify stocks or ETFs to trade. Seeing how many stocks and ETFs were filtered gives you an idea of the stock market's breadth. If a relatively large number of stocks are hitting significant highs when the market is hitting new highs, it further confirms the bullish rally. If a few stocks are hitting highs when the market is moving higher, it suggests that the buying pressure is drying up.</p><p>Another point to remember is that a stock getting filtered out on a scan doesn't mean you should blindly buy the stock. You still need to do your due diligence. Let's look closely at AMD stock and determine if it's worth the investment and where to set your price targets.</p><h2>AMD Keeps On Advancing</h2><p><img src="https://d.stockcharts.com/img/articles/2024/01/24/515d8342-84c2-493c-95ed-98ed1cc2b736.jpg" style="display: block; margin: 0px auto;"></p><p><span class="image-caption">CHART 3. AMD STOCK RALLIES HIGHER BUT FOR HOW LONG? Keep an eye on volume, relative strength index, and money flow index to identify a buying slowdown. A divergence between price and money flow could indicate an upcoming pullback.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Since November, AMD stock's share value has been moving higher. Looking closely at the AMD price chart above, you'll see the following price action.</p><p target="_blank">On November 1, the stock price had a wide range day with a spike in volume. Note how the stock performed with respect to the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:bollinger_bands" target="_blank">Bollinger Bands</a><span target="_blank">.</span></p><p><img src="https://d.stockcharts.com/img/articles/2024/01/24/0a8aefd2-e78f-4847-aed6-ec02684e0140.jpg" style="display: inline; margin: 0px 15px; float: right; width: 550px;" onclick="window.open('https://stockcharts.com/')"></p><ul><li>AMD stock went close to the upper band, pulled back in December, and reversed and broke above the upper band.</li><li>The stock price walked along the upper band for a while, traded sideways for a few days, and again attempted to reach the upper band.</li><li>It didn't quite make it and pulled back and fell below the middle band.</li><li>On January 6, AMD stock moved above the middle band and touched the upper band before pulling back slightly.</li><li>On January 17, the stock broke above the upper Bollinger Band and continued trending higher, for the most part.</li></ul><p>When is a good time to add AMD to your portfolio? When a stock reaches a new high, it's natural to think it may be too late to get in. But remember, stocks don't move higher in a straight line. They pull back, and those pullbacks can present an entry opportunity.</p><blockquote>You need to exercise patience if you want to improve your financial well-being.</blockquote><p>Looking at the chart of AMD, there were a few times during the uptrend when AMD's stock price pulled back to the middle Bollinger band and reversed. There's a chance it could happen again, but maybe not in the next few days. This is where you need to tame the fear of missing out (FOMO). You need to exercise patience if you want to improve your financial well-being.</p><p target="_blank">It also helps to add some indicators to your chart. In our AMD chart, you can see volume overlaid on the price, the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi" target="_blank">relative strength index</a><span target="_blank"> (RSI), and the </span><a href="https://school.stockcharts.com/doku.php?id=technical_indicators:money_flow_index_mfi" target="_blank">money flow index</a><span target="_blank"> (MFI). Volume is declining as AMD's share value continues to rise.</span></p><hr><h3 target="_blank">How To Recreate the Chart Using SharpCharts</h3><ul><li target="_blank">Enter AMD in the symbol box.</li><li target="_blank">Select <strong>Overlay</strong> from the <strong>Volume</strong> dropdown menu.</li><li target="_blank">Select <strong>Bollinger Bands</strong> under <strong>Overlays.</strong></li><li target="_blank">Select <strong>RSI</strong> and <strong>Money Flow Index</strong> (MFI) in the <strong>Indicators</strong> section.</li></ul><p target="_blank"><img src="https://d.stockcharts.com/img/articles/2024/01/24/f4f14e07-2c00-4fb4-a2e6-4335595e26bd.jpg" style="display: block; margin: 0px auto;"></p><hr><p>It's also important to note that the RSI is above 70, which puts AMD in overbought territory. The RSI could stay overbought for an extended period, especially if the stock continues to trend higher.</p><p>When you turn your attention to the MFI, it's clear that the money flowing into the stock is declining. This divergence between price and indicator could signal a bearish move ahead.</p><h2>Setting Your Price Targets</h2><p>First, add AMD to one of your <strong>ChartLists</strong> (and if you're not sure how to create one, check out <a href="https://support.stockcharts.com/doku.php?id=chartlists" target="_blank">this link</a><span target="_blank">) and review the chart regularly. When you see the stock price sell-off, watch the middle band. If the stock price breaks below the middle band and reverses, check the volume, RSI, and MFI.</span></p><ul><li>If the reversal has momentum, i.e. increasing volume, MFI, and RSI, a good entry point would be just above the middle band.</li><li>An ideal exit target would be just above the upper band.</li><li>If the stock falls below the middle band and overall market conditions weaken, you may want to revisit the stock later. Monitoring AMD's chart doesn't hurt because it could make a comeback.</li></ul><p><strong>The bottom line: </strong>Don't ignore AMD's stock chart.</p><hr><p><strong><em>Disclaimer: </em></strong><em>This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>Advanced Micro Devices, Inc. (stock symbol: AMD) is one stock that met several positive trading criteria during Wednesday's trading. The stock price hit a new 52-week high and moved above its upper Bollinger Band®, its upper price channel, and so on.The AMD chart below displays a Bollinger Band overlay and the Distance From 52-Week High indicator in the lower panel (available in StockChartsACP).CHART 1. AMD STOCK RISES TO NEW 52-WEEK HIGH. The stock price has moved above its upper Bollinger Band and has hit a new 52-week high. How much higher can the stock move?Chart source:...Utilities' Unique Seasonal Powers: The Best Months to InvestKarl Montevirgentag:stockcharts.com,2024-01-18:post-270692024-01-18T22:34:47Z2024-01-18T22:34:47Z<p><img src="https://d.stockcharts.com/img/articles/2024/01/18/c4fdd407-b517-4733-8e47-89e2aeea9ace.jpg" style="display: block; margin: 0px auto;"></p><p>The Utilities sector is known as a defensive investment simply because it generally withstands all phases of the business cycle. Utility stocks are often considered complementary assets to assets aimed at "growth."</p><p>Yet even within defensive sectors like Utilities, growth is also a matter of timing. From a seasonal perspective, there are some months when Utilities tend to outperform the S&P 500. Considering the rising demand for electrification and EV adoption, and that many utility companies are adopting artificial intelligence (AI) technologies, the rising tide in Utilities might come in stronger and higher this time than in years previous.</p><p>Whether it does or not, it's worth anticipating such a trend, especially if you are looking at Utilities for a short-term seasonal play or to further diversify your portfolio long-term. Let's look at the Utilities Select Sector SPDR Fund (XLU) as a sector proxy by focusing on the following:</p><ul><li>XLU's 10-year seasonal performance</li><li>XLU's 10-year seasons' performance against the S&P 500 ($SPX)</li><li>XLU's weekly and daily performance</li></ul><p>If you want to allocate some of your funds to XLU, you must find a good entry point.</p><hr><h3 style="color:red;">How to Access the Seasonality Tool</h3><p>There are different ways to access the seasonality tool in StockCharts.</p><ul><li>Click the <strong>Charts & Tools</strong> tab at the top of the StockCharts page, enter a symbol in the Seasonality panel, and click "Go." </li><li>Enter the symbol in the <strong>ChartBar</strong> at the top of the page and select "Seasonality" from the dropdown menu on the left.</li><li>From <strong>Your Dashboard</strong>, in Member Tools, click on <strong>Seasonality</strong>.</li><li>Below the seasonality chart, you'll find links to instructions and quick tips that give more detailed instructions.</li></ul><hr><h2>XLU's 10-Year Seasonal Performance</h2><p><img src="https://lh7-us.googleusercontent.com/UQUQ4FaOLsiFaKA3dn5Egd6e-90F9-udRQ23L8ZjRGYSFYz2Nn73jIsGDTEbpZ3hzU-S4s6mN9aUuW7xGklWjVfaYgdpxS9bGbAsTcW0KZBHegKzCtKIOXgzVEIaG3mTq5tTdYKyDtgjLiji_86BZrU"></p><p><span class="image-caption">CHART 1. XLU'S 10-YEAR SEASONAL PERFORMANCE. Look at its higher closing rate relative to its average monthly returns and compare it to the chart below, which tracks its relative seasonal strength against the broader market.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>XLU's strongest seasonal months are in March (67% higher-close rate and 3.2% average return), July (78% higher close rate and 3.3% average return), and October (89% higher-close rate and 2.2% average return).</p><p>February is seasonally its worst month, with a 33% higher-close rate—<em>a 67% lower-close rate</em>—and an average return of -2.5%. This seasonal context is important to know because we're heading into February in a matter of weeks. But a seasonality reading would seem incomplete if you didn't also look at XLU's performance against the broader market.</p><h2>XLU's 10-Year Seasonal Performance Against the S&P 500</h2><p><img src="https://lh7-us.googleusercontent.com/bvcWeBRCP07YU6i15OJlhlzzmZP7dkPf4AqAkLn3TZJB8W1WwGRfY7F1nD9jnezOqwSfnKzu8avT00BzmHMwnPWCi3vKRP1JSUdJD6LuPPlHFoheLfbv3pOtPNvZAgZRYlSiiBOxPhG00wXLX_Avb5c"></p><p><span class="image-caption">CHART 2. XLU'S 10-YEAR SEASONAL PERFORMANCE AGAINST THE S&P 500. Compared to the S&P 500, seasonality charts can change quite drastically.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>In contrast to the seasonality chart in Chart 1, July is a poor month for XLU compared to the S&P 500. XLU's comparative performance in October is rather tepid. However, March's performance against the S&P 500 is seasonally the strongest, while February remains similarly weak.</p><p>So, if you're aiming for a seasonal play, might February be a favorable entry point in anticipation of March's potential outperformance? Let's look at XLU's weekly performance.</p><h2>XLU's Longer-Term Cyclicality</h2><p><strong><img src="https://lh7-us.googleusercontent.com/KLBu-hCO8za7btvXfJTi8XqnIrqsvdK_E00Aat_Rsvk7N0JtkNvEUEfgc2-sMbYrbhUm_unV2GJ0m4RL0rY77apkyobfgRyAq3FGF3KbBf2b2m6SdhPqqD8YXvyk03shEdSN_TvO7FVaTxG6ZiuCQ9Y"></strong></p><p><span class="image-caption">CHART 3. WEEKLY CHART OF XLU. It may be channeling downward, but are the smaller cycles relatively consistent?</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p><br></p><p>Since the March 2020 crash, where XLU (along with the market as a whole) bottomed out, you can see how it channeled upward, peaking in the summer of 2022, before then channeling downward.</p><p>Many analysts would argue that Utilities tend to see longer growth swings a year prior to (and months after) a recession. It's a safe-haven play. As for 2024 prospects, analyst predictions for Utilities and XLU remain mixed. However, note XLU's strong cyclicality, referencing its swings to the <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:stochastic_oscillator_fast_slow_and_full" target="_blank">Stochastic Oscillator's</a> high-to-low cycles. XLU is currently in a down cycle. And this matches both of XLU's seasonality profiles mentioned above. So, if you were to jump into February weakness to ride XLU's potentially strong March upswing, what's a good buy point?</p><p>A couple of things: If seasonality expectations prove consistent with previous years, then it's reasonable to expect further weakness in February and a potential rally in March.</p><p>Overlaying an <a href="https://school.stockcharts.com/doku.php?id=technical_indicators:ichimoku_cloud" target="_blank">Ichimoku Cloud </a>in the daily chart <span target="_blank">is helpful for reference and context (see chart below). Its lowest point coincides with the first level of potential support near $59.00 (November lows indicated by dashed line labeled 1). Price is likely to reach this level in a few weeks, and you'll want to see whether price begins consolidating at the level or whether it bounces. This level also serves as a potential buy point if you're looking for a seasonal trade.</span></p><p><img src="https://lh7-us.googleusercontent.com/XkOTOQlX3Xq0bCN8Q2qxqnGK4rbennDxVrD1-Y8B8V6hAgZi_PHsccodQeZKfxZybsPtoGzObvIMAXz_4HfLRHusU_9R1BQCfeiDJubz89NwaXPXJK980EqhefCq7WQsHeFYQlChc28I_6M0XKljd9k"></p><p><span class="image-caption">CHART 4. DAILY CHART OF XLU. Note the three possible entry points coinciding with XLU's February seasonal weakness.</span><em><span class="image-caption">Chart source: StockCharts.com. For educational purposes.</span></em></p><p>Worse to worst-case scenarios will see price breaking below the first level and potentially bouncing off the second and third levels indicated on the chart. The third level ($54.50) marks a two-year low; you'll likely see plenty of reaction if the price closes toward that level.</p><p>So if you're looking to take advantage of February weakness and March strength expectations, you'll want to set a price alert at $60 and observe what happens when price reaches $59. If no consolidation or reversals occur, and if price continues to fall well into February, set alerts for the next two levels indicated on the chart. It's kind of a see-and-respond scenario. And timing, especially considering it's a seasonality play, is everything in this situation. But at least you have the reference points to help make a better decision.</p><hr><h3 style="color:red;">How To Set a Price Alert</h3><p>Setting a technical alert at these support and resistance levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision.</p><p>To access the Technical Alert Workbench, follow these steps:</p><ul><li>From <strong>Your Dashboard, </strong>click the <strong>Alerts</strong> button > <strong>New</strong> in <strong>Your Alerts</strong> panel.</li><li>In the Alerts workbench, choose which type of alert you want to create from the <strong>Alert Type</strong> buttons at the top left.</li><li>To create a price alert, select <strong>Price Alert</strong> as the alert type.</li><li>Add a symbol in the symbol box, set your price trigger, and choose how you wish to be notified.</li><li>Click the <strong>Save Alert</strong> button.</li></ul><hr><h2>The Bottom Line</h2><p>Remember that this particular seasonality reading frames the larger economic context surrounding Utilities. Many changes and new developments are happening, and analyst predictions are mixed. So, set a technical price alert at the support and resistance levels as you weigh your potential entry points.</p><p><img src="https://d.stockcharts.com/img/articles/2024/01/18/1d84c6a5-41c2-458b-8708-78611b9fb824.jpg" style="display: block; margin: 0px auto;" onclick="window.open('https://stockcharts.com/')"></p><hr><p><strong><em>Disclaimer: </em></strong><em>This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.</em></p>The Utilities sector is known as a defensive investment simply because it generally withstands all phases of the business cycle. Utility stocks are often considered complementary assets to assets aimed at "growth."Yet even within defensive sectors like Utilities, growth is also a matter of timing. From a seasonal perspective, there are some months when Utilities tend to outperform the S&P 500. Considering the rising demand for electrification and EV adoption, and that many utility companies are adopting artificial intelligence (AI) technologies, the rising tide in Utilities might come...USD Strength Accelerates After Completing Bearish Flag in EUR/USDJulius de Kempenaertag:stockcharts.com,2024-01-17:post-270592024-01-18T01:55:19Z2024-01-17T22:16:29Z<p><img src="https://d.stockcharts.com/img/articles/2024/01/17/c8bee05e-8d27-4982-80c9-e8dedd557ab1.jpg" onclick="window.open('https://stockcharts.com/h-sc/ui?s=%24EURUSD&p=D&b=5&g=0&i=p28651410083&a=1581568430')" style="display: block; margin: 0px auto;"></p><p>After a rally from $1.045 to a high of $1.1140 from October to December 2023, the EUR/USD exchange rate has now executed a bearish flag formation, which resulted in an acceleration of the decline (strength for USD). As a result, the currency pair has now also broken below trendline support, adding to and confirming the bearish outlook for the next few weeks.</p><p>Based on the flag formation, a price target between $1.0650 and $1.0700 can be calculated. That area coincides with the horizontal (green-shaded) support area that has offered support and resistance over the last 8-9 months.</p><p>Upside potential for EUR/USD is now limited, as the former support line and the lowest point of the flag are expected to start acting as resistance overhead.</p>After a rally from $1.045 to a high of $1.1140 from October to December 2023, the EUR/USD exchange rate has now executed a bearish flag formation, which resulted in an acceleration of the decline (strength for USD). As a result, the currency pair has now also broken below trendline support, adding to and confirming the bearish outlook for the next few weeks.Based on the flag formation, a price target between $1.0650 and $1.0700 can be calculated. That area coincides with the horizontal (green-shaded) support area that has offered support and resistance over the last 8-9 months.Upside...