Marathon Oil (MRO) has had two marathon buying days with massive volume. While Day One didn't see any price movement on large volume, Day Two sure did. The price has just moved out of a short 2-month base and looks set to accelerate from there. The stock is meaningfully off the October highs, but it is showing all the right signs for a break from the downtrend. The SCTR is surging from below 10 to above 30. This suggests some strong price action relative to the other large caps. The down trend in relative strength (in purple) is breaking the down trend as well. With a little more positive price action, we could see fresh three-month highs in relative strength, which is typically where good rallies start from. The beautiful surge in volume shows interest in the stock as it breaks out of the base. Lastly, there is a green down trend line in momentum shown on the PPO that looks ready to be broken. A break above zero and above the down trend in momentum is definitely bullish.
On a weekly chart, the stock seems to be going for a pattern three-peat. We've seen this movie before. The stock has lots of room to run with a double off of the lows and a 50% gain from here just to get back to the July highs. Looking at the two past runs in the stock, we can see that they started in much the same way. While the volume looks only marginally higher so far, there is another full day of trading to add onto this column.
Wednesday's Market Buzz was a must-watch edition discussing prominent stocks in the software industry that you've never heard of. You can find the new Wednesday Edition of Market Buzz on the StockCharts TV YouTube channel.
For more, check out this week's Weekly Market Roundup video! There is a conversation about the global markets and the precarious setups they are in. Also, the last 5 to 10 minutes discusses the $USD and other currencies. I am watching for confirmation from currencies, bonds and global markets, which may converge to show their direction over the next few weeks.
Last week, I discussed the bond setup as being attention-getting. This week, it continued to build on that setup. I would encourage you to watch last week's video here.
If you would like to learn more about the basics of charting, check out Stock Charts for Dummies. The first section of the book walks through all the chart settings you need to help you get the charts you want, the second section explores why you might use charts for investing and the third section is about putting it all together.
If you are missing intermarket signals in the market, follow me on Twitter and check out my Vimeo Channel. Bookmark it for easy access!
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts for Dummies
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The Canadian Technician