Don't Ignore This Chart!

A Momentum Break for Ross Stores


Ross Stores (ROST) recently bounced off its rising 200-day SMA with a bullish candlestick pattern and short-term RSI broke to its highest level of the month. It looks like the short-term pullback is ending and the bigger uptrend is resuming.

ROST plunged in November-December with a sharp decline below the 200-day SMA. This plunged caused the 200-day to flatten in December, but it never really turned down. ROST quickly rebounded in January with a move back above the 200-day and the 200-day is back on the rise.

Short-term, the stock edged lower from late April to mid May with a decline back to the 200-day. A harami formed in mid May and there were also two inside days. These signaled indecision after a sharp decline as the stock suddenly firmed. ROST then gapped up and bounced the last three days. Last week's lows and the rising 200-day mark the first support level to watch for a failure.

The indicator window shows 5-day RSI for a short-term momentum perspective. RSI dipped below 30 twice in May and then broke above its prior highs last week. This represents a momentum breakout of sorts.  

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Arthur Hill, CMT
Senior Technical Analyst,
Author, Define the Trend and Trade the Trend

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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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