Don't Ignore This Chart!

Paccar Holds Big Breakout and Goes for Another


Paccar (PCAR) sports a bullish looking chart with two breakouts in as many months. The stock surged from October to December and then corrected with a decline that retraced 62%. After three bounces off the 62% retracement area, the stock broke out with a surge in mid-April. This breakout ended the correction from late December to March and signaled a continuation of the October-December advance. More details are posted below the chart.  

Click this image for a live chart.  

The broken resistance zone around 64 turned into support as the stock fell back into early May. Notice that a falling wedge formed and this decline retraced 50-62% of the April surge. Both the retracement amount and the pattern are typical for pullbacks within bigger uptrends. This pullback ended with a gap up and wedge breakout last week. The gap is holding, the breakout is bullish and I would mark first support at 64. The indicator window shows the price relative (PCAR:$SPX ratio) turning up in April as PCAR starts to outperform and show relative strength. Notice that you can check the "full quote" box to see detailed information above the main chart. 

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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