Don't Ignore This Chart

Regeneron Bounces within a Massive Base

Regeneron has gone nowhere since February 2016, but recent volume bars suggest that this may be a massive base. The stock surged off the 325 area with big volume in November. After falling back into January, the stock held above the October low and turned up the last 14 weeks. Notice that upside volume far outpaced downside volume two of the last five weeks. This stock appears to be under accumulation and a breakout at 400 would target an assault on range resistance. Careful this week because the Regeneron reports earnings on May 4th. 

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Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Bank Of America (BAC) Is Technically Concerning

The banks have been rocking as they have been surging since last summer. In the last few months they have paused their rally. Since they announced earnings, they have not really rallied. This week had a nice pop but the real question is can they continue? While history can be a potential guide, it is important to realize the perilous clues on the chart as they form. Whether they play out is yet to be seen, but this is a situation that shows up near tops. 

Bank of America (BAC) has some concerning technical signals. Lowering momentum on the higher peak is a warning flag. Seeing that little negative divergence is always a conversation starter. However, now the MACD has gone below zero. If it rolls over under the zero line, this is a typical loss of momentum on the right shoulder of a topping pattern. While we don't know if it will follow through, this setup allows us to realize the potential for a move lower when we least expect it. Notice the MACD has slowed slightly while still below zero as you can see in the zoom box. It shows as a lower histogram.

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Exact Sciences Corp Posts Solid Results, Completes Right Side Of Cup

On Thursday morning, Exact Sciences Corp (EXAS) was the #1 percentage gainer on the NASDAQ, rising nearly 26%.  While that's a massive move by any measure, I doubt that the move higher in EXAS has ended.  If you look at a weekly chart, you'll see that yesterday's gain in EXAS actually completes (or nearly completes) the right side of a very bullish long-term cup with handle pattern.  Take a look:

Those big gains yesterday simply took EXAS back to where it was in early 2015.  I'd expect to see consolidation over the next several weeks, but ultimately a breakout that carries the stock to 55 based on its measurement.  Make sure the volume confirms on a breakout of its 2015 high.

Quarterly results for EXAS were released Thursday morning and they showed that the company had handily beaten both its revenue and earnings estimates, setting the stage for yesterday's advance.

Happy trading!

Tom

Dell Technologies (DVMT) Pushes Up Out Of Consolidation

Dell Technologies (DVMT) was a recent IPO out of Dell and EMC. Here is the chart. With the technology stocks trading so well, this chart continues to climb.

The volume is a little obscured by the 40 Million share candle. The average daily volume is a little clearer in the zoom box on the right, showing around 1.4 million shares. The momentum is starting to turn up again. 

Good trading,
Greg Schnell, CMT, MFTA.

 

Vodafone and Cable Could be Bottoming

Even though Vodafone remains in a long-term downtrend, the stock has been on my watch-list recently because it could be putting in bottom. Analysis of Vodafone and other ADRs is not straight-forward because there is a currency component. Usually, the movement of the stock is more than enough to compensate for any adverse currency movements, but the British Pound took a big hit in June and this adversely affected the stock. Today, I will first look at Vodafone in British Pounds (VOD.L) and then Vodafone in Dollars (VOD). I will then look at Cable (Pound-Dollar cross) and the British Pound ETF (FXB).  

The chart below shows VOD.L trading around 200 pence, which is around 2 pounds. Don't worry, it is not a penny stock because lots of stocks in the UK are priced between 100 and 1000 pence (1 to 10 pounds). When possible chartists should analyze a security in the currency in which it is traded. This provides a cleaner picture for the supply-demand dynamics, trends and chart patterns. VOD.L could be forming a double bottom with resistance in the 215 area. A breakout here would confirm the pattern and target a move to the 240 area. Shorter-term, the stock surged to 215 in February-March and then retraced around 61.8% with the pullback to the 200 area. A higher low could be forming as the stock gapped up three days ago and this gap is holding. Note that Vodafone reports earnings on May 5th. 

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EuroTop 100 Hits New High, but Still Not Outperforming S&P 500

The Eurotop 100 Index surged over 2% and hit a new high to affirm its current uptrend, which began with the breakout and golden cross in early December. The index established support around 2900 over the last two months and this is the first area to watch going forward. A break below this level would be negative and suggest that a correction is beginning. Even though the index is at a new high, it is still performing in-line with the S&P 500 over the past year. The indicator window shows the price relative falling into June 2016 and then flattening over the last ten months. The top European stocks are not outperforming the top US stocks until this ratio turns up. 

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Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Dycom Breaks Cup Resistance With Strong Volume

Our major indices have been consolidating for many weeks and that's enabled many individual stocks to consolidate in bullish continuation patterns.  Dycom Industries (DY) is one such stock as it formed a long-term cup from early-August to late-February before printing a handle throughout March.  The right side of the cup showed very heavy volume before volume tailed off as the handle formed.  This week DY has broken out on extremely heavy volume as you can see below:

The blue arrow shows that volume is about double of any week over the past six weeks and there's still one more day left this week.  A pullback to test the breakout level just below 100 would be the best entry price, while the target would be the measurement of this pattern.  That measurement would be roughly 125.

Happy trading!

Tom

Etrade Corrects into Fibonacci Cluster

It has been a rough year for small-caps because the Russell 2000 iShares is up just 1.34% year-to-date and severely trailing the S&P 500 SPDR, which is up around 5.5%. Chartists looking for clues of a small-cap revival may want to watch E-Trade Financial (ETFC) and the other discount brokers (SCHW and AMTD). I will focus on ETFC today because it is currently correcting within an uptrend. An end to this correction could signal a return to animal spirits and a small-cap revival. First and foremost, the long-term trend is up because the stock hit a 52-week high in January and the 50-day EMA is above the 200-day EMA. 

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