Don't Ignore This Chart

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About this blog: The blog contains daily articles with intriguing or unusual charts selected by one of our Senior Technical Analysts, along with a short explanation of what exactly caught their attention and why they believe the chart is worth noting.

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Don't Ignore This Chart

XLC recovering on Relative Rotation Graph, but for how long?

by Julius de Kempenaer

  On the daily Relative Rotation Graph above, the new XLC sector is positioned inside the improving quadrant. XLC moved into the improving from lagging 5 trading days ago and is now heading higher on both scales at a positive RRG-Heading. Measured on the JdK RS-Ratio scale (horizontal axis), XLC is still one of the weaker sectors in the S&P universe with only XLRE and XLU at lower RS-Ratio levels. The big difference is that XLRE and XLU are heading South-West while XLC is heading North-East. Combining this view of RRG with the weekly version (below) makes Read More 

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Alphabet (aka Google) Hits Potential Reversal Zone

by Arthur Hill

Alphabet (GOOGL) fell around 10% from a recent high and this decline looks like a pretty normal correction within a bigger uptrend. Note that GOOGL is the biggest component (23.15%) in the new Communication Services SPDR (XLC). Facebook (FB) is the second largest weighting (17.69%) and Disney (DIS) is a distant third (4.65%). First and foremost, the long-term trend is up because Alphabet recorded a 52-week high in July and price is well above the rising 200-day SMA. This is the big trend is at work and it sets my trading bias, which is bullish. The stock gapped up and Read More 

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Regeneron Holds Break as Volume Picks Up

by Arthur Hill

Regeneron (REGN), a large-cap biotech stock, is part of the Health Care SPDR (XLV) and a top ten holding in the Biotech iShares (IBB), Both ETFs hit 52-week highs recently and show upside leadership. The stock is lagging in the 52-week high category, but the long-term trend is up and the stock is breaking out of a flag formation. First, the long-term trend is up because the stock broke the March highs with a 39% advance from May to August. Second, the 50-day EMA is above the 200-day EMA and price is above both EMAs. After breaking the red resistance zone in early Read More 

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Caterpillar Crawls Out Of A Trench (CAT)

by Greg Schnell

Caterpillar moved above the 200 day moving average this week to get out of the trench it was building. This trench has been a gentle correction from a massive uptrend in 2017. The SCTR is returning to 75 which is a great signal of strength. Notice the SCTR behavior in 2017. The shaded area chart shows the $SPX relative strength moving to new 3-month highs.  Price is breaking above the channel with big volume. Lastly the momentum shown on the MACD has moved above zero. Looking left, that is a big change. As long as it holds the 200 day moving average, this Read More 

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Canadian Healthcare and Financial Services winning over Energy

by Julius de Kempenaer

While browsing through some pre-populated RRGs on the site I stumbled upon the chart holding Canadian sectors. What immediately triggered me was the sharp move of the Healthcare sector into the leading quadrant at almost 45 degrees which means that the sector is moving higher on both axes which is a strong sign. In a closed universe like this, if something moves up something else must go down to offset the move. And in this case, that seems to be the Energy sector which just crossed over into the lagging quadrant in pretty much the exact opposite direction as Healthcare. Read More 

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Disney Hits Potential Reversal Zone

by Arthur Hill

Disney hit a new high in early August and pulled back into September. The stock is part of a strong sector, consumer discretionary, and this pullback reached a potential reversal area. First and foremost, the long-term trend is up because the stock formed a higher low from October to April and a higher high from January to August. The August high was also a 52-week high and the 50-day EMA is above the 200-day EMA. After hitting a new high, the stock retraced around 61.8% of the prior decline with a decline back to the 109 area. This retracement amount is Read More 

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Procter & Gamble Attempts to Turn

by Arthur Hill

The Consumer Staples SPDR (XLP) has been leading the market since early May and Procter & Gamble is the largest stock in the sector (12.58%).  On the price chart, PG is in the midst of a long-term trend change and the short-term trend is also turning up. First and foremost, the long-term trend is turning up as the 50-day EMA moves above the 200-day EMA. This crossover is still in the early stages, but it is a positive sign as long as it holds. As with XLP, PG is leading over the last four months, but lagging over the past year because it remains well below Read More 

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United Technologies (UTX) Pushed The Penthouse Button

by Greg Schnell

United Technologies is a member of the Dow Jones Industrial Average. While this is a high profile group of stocks, the other stocks are commonly stealing the spotlight. This week, United Technologies (UTX) pushed the penthouse button to break above the trading range.  The chart features a few nice technical points.  When a stock has an SCTR oscillating between 25 and 75, it is just an average stock. In this case, UTX is guilty of that, with similar price profile to the $SPX. That's not bad, but we are trying to buy outperformance not Read More 

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Henry Schein Starts to Shine

by Arthur Hill

Outside of company specifics, the broad market environment and the sector are the biggest influences of a stock's price. The S&P 500 hit a new high recently so we are in a bull market. The Health Care SPDR (XLV) also hit a new high recently and it is one of the leading sectors. This combination bodes well for stocks in the healthcare sector and I will highlight a breakout in Henry Schein (HSIC), a company that supplies dental products and services, as well as healthcare products and services. First, the long-term trend is up. The chart shows a large inverse Read More 

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Alaska Air (ALK) Rises Above The Clouds

by Greg Schnell

The airlines are a mixed bag currently. American Airlines (AAL) has an ugly chart. Alaska on the other hand is leaving the runway and starting to rise above the clouds of 2018. There are new fresh breakouts occurring on this little pullback. Try to find stocks that might be able to find higher ground. With the global weakness, I would be inclined to keep stops tight. Good trading, Greg Schnell, CMT, MFTA Read More 

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