Don't Ignore This Chart!

Tractor Supply May Have Set A Bottom

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The NASDAQ 100 has been quite strong in 2017, but it's not because of Tractor Supply's (TSCO) performance.  TSCO had lost one third of its market value from the beginning of the year through early July, but a positive divergence emerged and that suggested that downside price momentum was slowing.  Thursday's action was quite bullish with TSCO breaking above its 50 day SMA on very heavy volume.  Check it out:


When a company drops a bombshell - and missing both top line and bottom line estimates certainly qualifies - and the stock price reacts the way that TSCO's did today, then an argument can be made that a bottom has been set.  Technically, TSCO printed that positive divergence and today easily cleared its 50 day SMA and tested the June high.  This potentially established the right side of a neckline in a bottoming head & shoulders pattern.  A pullback to test a key moving average like the now-rising 20 day EMA could print the reverse right shoulder.  In any event, a high volume close above 58 would be bullish.

TSCO is one of twelve NASDAQ 100 stocks that I've annotated in the Trading Places LIVE ChartList.  Feel free to check them out by CLICKING HERE.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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