Don't Ignore This Chart

Volume Confirms Breakout For WellCare Group

WellCare Group (WCG) posted quarterly earnings that beat Wall Street consensus estimates and the stock soared above recent price resistance.  Volume surged as traders accumulated the healthcare provider.  The Dow Jones U.S. Health Care Providers Index ($DJUSHP) broke out recently and WCG has performed exceptionally well on a relative basis:

WCG broke its down channel a couple of weeks ago and has seen its SCTR (StockCharts Technical Rank) rising ever since.  Tuesday's breakout was accompanied by the heaviest volume of 2017, suggesting that WCG is under accumulation.  185-190 should provide excellent price support on any retracement.

Happy trading!

Tom

BroadCom Gets a Squeeze and Makes a Move $BRCM

BroadCom looks set to continue its long-term uptrend with a breakout and fresh 52-week high. The chart shows BroadCom (AVGO) with Bollinger Bands, the Bandwidth indicator and the Percentage Price Oscillator (PPO). First, notice that the stock hit a 52-week high in July and the PPO(50,200,0) has been above zero all year, which means the 50-day EMA is above the 200-day EMA. The long-term trend is clearly up and this means our trading bias should be bullish. In other words, we should expect bullish resolutions to short-term setups.  

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When A Hammer Meets Gap Support

I'm a big fan of candlesticks, particularly reversing candlesticks as they many times signal that a short-term downtrend has ended in an overall uptrending stock.  One of my favorite trading strategies is to trade strong stocks off gap support.  So what happens when both strategies meet?  Well, JD.com (JD) has both right now so its trading behavior over the next two weeks will be quite interesting as that's when it reports its next quarterly results.  Here's the current technical outlook:

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The Divergence is Just Icing on the Cake for T-Mobile $TMUS

T-Mobile is showing signs of life with an upturn off support and a positive divergence in RSI. As always, lets review the bigger picture before trying to make sense of current conditions. TMUS basically doubled from February 2016 to April 2017 with a 108% advance. This massive advance gave way to a pullback into July and the stock found support near 60. The 50-day EMA is above the 200-day EMA and the stock has been battling the 200-day EMA the last two months. Given the evidence, I would assume that the long-term trend is up. 

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Gold Miners Lose Price Support On Heavy Volume

The Dow Jones U.S. Gold Mining Index ($DJUSPM) held price support on its late-September swoon, but that was not the case with the recent selling.  The reason?  It's probably the reverse head & shoulders breakout on the U.S. Dollar (UUP).  A rising dollar normally sends gold prices (and gold miners) lower.  Check out these recent technical developments:

I'd be very careful with gold ($GOLD) and gold mining stocks unless, or until, neckline support on UUP is lost in the 24.40-24.50 area.  This reverse head & shoulders pattern is a bottoming formation for the dollar and Thursday's breakout action confirms it.  If the dollar continues to rise - as the reverse head & shoulders pattern breakout would suggest - I'd look for further weakness in gold miners.

Happy trading!

Tom

A Healthy Reaction to Earnings Reinforces Support in LH

Laboratory Corporation of America (LH) reported earnings today and surged above the 50-day moving average on the results. The trend since late July remains down, but recent price action is constructive and a breakout could be in the offing. The stock surged around 20% and hit a 52-week high in July. The 50-day moving average is above the 200-day and price is above the rising 200-day. Thus, the evidence supports a long-term uptrend. This indicates that the decline from July to October was a correction within a bigger uptrend. Notice how the stock retraced around 61.8% and formed a falling channel. 

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Biotechs Weak This Morning But Look To Be Reversing At Key Support

The Dow Jones U.S. Biotechnology Index ($DJUSBK) broke out of serious longer-term consolidation when it cleared 1800 price resistance in mid-June.  Since then, we've seen a nice uptrend, characterized by rapid advances and steady pullbacks.  The group lost nearly 120 points from Friday's intraday high to today's intraday low, however, but is attempting to print a reversing hammer on its 50 day SMA support.  Check it out:

I didn't annotate it on this chart, but the DJUSBT struggled recently (and back in July/August) after a negative divergence printed (higher price highs with lower MACD readings).  The key for this reversing candle today will be where we close because that candlestick isn't final until 4pm EST.  If the reversing candle is in place, then it would appear that Amgen (AMGN) could be a major beneficiary in the near-term as it's also trying to print a hammer at price and trendline support.

Happy trading!

Tom

US Bancorp Breaks out of Long Consolidation

US Bancorp (USB) ended a long corrective period with an upside breakout and this breakout is holding. Note that USB is part of the Financials SPDR (XLF) and the Regional Bank SPDR (KRE). These two are up double digits over the last six weeks and this puts has sector and the industry group strength behind the stock. On the price chart, USB advanced some 50% from June 2016 to February 2017 and then embarked on a long consolidation period. Even though this consolidation seemed to overstay its welcome, it was perhaps necessary to digest the big gains. Also keep in mind that a consolidation after a sharp advance is a bullish continuation pattern. There are signs that the advance is set to continue because USB broke out of the triangle pattern and this breakout is holding. The resistance zone turns into the first support zone and chartists can watch 52 for the first signs of a failed breakout. 

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

Plan your Trade and Trade your Plan
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This Popular NASDAQ 100 Stock Has A Horrendous Track Record Through December

Let me start by stating that the NASDAQ 100 has earned 61.9% of its gains over the past 20 years during the fourth quarter.  Yep, October through December has accounted for nearly two thirds of the gains on the NASDAQ 100.  So you would think that most of its component stocks would also perform quite well during that time frame....and they do.  There is one very notable exception, however, so (hint) you may want to "name your own price" and wait for entry.

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Using RRG to pick Ford from "most active" table

In the top-right corner of the homepage at StockCharts.com, there is a table that holds "Market Movers". It defaults to the top10 "most active" in the S&P 500 but you can change that using the buttons and drop-downs.

Below the table, you will find links to view the stocks in this table in CandleGlance or RRG format. Clearly, I am interested in the latter ;)

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