Don't Ignore This Chart

Bank of America Holds above Breakout Zone $BAC

Bank of America (BAC) broke out of a large bullish continuation pattern three weeks' ago and this breakout is holding. Overall, BAC surged from June 2016 to February 2017 and then consolidated with a large triangle pattern. A consolidation within an uptrend is a bullish continuation pattern and the breakout around 25 signaled a continuation of this uptrend. The breakout zone around 25 turns into the first support level to watch. A close back below 25 would throw cold water on the breakout and warrant a re-evaluation. I would not, however, turn completely bearish because this would not be enough to reverse the long-term uptrend. The August lows mark key support for the long-term uptrend. The indicator window shows momentum improving as MACD turns up and moves above its signal line. 

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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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Will Seasonal Tailwinds Stem The Tide Of Selling In This Technology Company?

Juniper Networks (JNPR) was under heavy selling pressure last week to open October, a seasonally bullish month for JNPR as the stock has averaged gaining more than 13% each October over the past two decades.  The irony here is that we've seen JNPR twice in recent years open October in the same bearish manner (black circles below) only to bounce off trendline support.  Check this out:

While JNPR has been able to maintain an uptrend over the past five years, it's fairly remarkable considering that its industry group - Dow Jones U.S. Telecommunications Equipment Index ($DJUSCT) - has badly lagged its technology peers over the same time period.

While last week was horrid for shareholders, the bullish engulfing candle on Friday (not shown in above weekly chart) suggests that October 2017 could mark a short-term bottom similar to October 2016 and October 2014.

Happy trading!

Tom 


 

Citrix Ends Correction with Five Week Surge

Citrix (CTXS), which is part of the Internet ETF (FDN) and Software iShares (IGV), appears to have ended its correction and resumed its long-term uptrend. The stock hit a 52-week high in early 2017 and then declined from May to August. CTXS underperformed the market and its peers during this timeframe, but the decline was a correction within a bigger uptrend. Notice that the move retraced around 61.8% of the prior advance and formed a falling channel. The retracement amount and pattern are typical for corrections. CTXS broke out of the channel with pretty convincing a five week advance. This move looks long-term bullish and a continuation of the bigger uptrend would target a move to new highs in the coming months. 

Follow me on Twitter @arthurhill  - Keep up with my 140 character commentaries.

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

Plan your Trade and Trade your Plan
*****************************************

Bullish Momentum Building Again On AMD

Advanced Micro Devices (AMD) spent over a year with its SCTR among the highest of all individual stocks.  It was an impressive rally for sure as its stock price rose from below $2 to above $15 in 13 months.  But even the hottest stocks need to evenually consolidate to unwind perpetually overbought conditions.  AMD has been doing that, frustrating thousands of traders.  I don't believe this bullish story is over yet.  In fact, I view the consolidation as a very bullish ascending triangle pattern with volume picking up today to perhaps close at a 2 1/2 month high by 4pm EST.  We'll see.  In the meantime, I fully expect to see AMD challenge its double top and triangle resistance as shown below on this weekly chart:

Over the past 2-3 weeks, the SCTR has skyrocketed back above 80 and when AMD finally makes its ascending triangle breakout, I suspect that its SCTR will move back up into the high 90s as AMD regains its leadership role on the NASDAQ.

Happy trading!

Tom

Comcast Fails at a Key Moving Average

A recent double top and failure at the 200-day SMA point to lower prices for Comcast (CMCSA). The double top formed from May to early September with two highs around 42 and a low around 38. Comcast broke this low with a sharp decline and then became oversold. The stock bounced back to the break zone and the 200-day SMA in in the second half of September, but turned lower the last four days and this solidifies the double top break. Also notice that a rising flag formed and the stock broke the flag line this week. The indicator window shows the PPO (5,30,5) turning down and breaking its signal line. Based on the height of the double top (4 points), the downside projection is to around 34. This is my target as long as resistance at 39 holds. 

Follow me on Twitter @arthurhill  - Keep up with my 140 character commentaries.

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

Plan your Trade and Trade your Plan
*****************************************

Is Now The Time To Jump In F5 Networks?

F5 Networks (FFIV) has a seasonal history of performing extremely well in October and November, but technically the stock has been a wreck since topping in March 2017 and the early October returns haven't been very good either.  There is hope, however, in the form of upcoming price support and it appears as though longer-term weekly momentum could be turning as well.  Check out this weekly chart:

Continue reading "Is Now The Time To Jump In F5 Networks?" »

One of the Weakest Stocks in the S&P 500 Looks Set to Get Even Weaker

The S&P 500 is near all time highs and we are in a bull market, but Advance Auto Parts (AAP) did not get the memo and recent signals point to new lows. First and foremost, the long-term trend is down because the 50-day SMA is below the 200-day SMA and the stock hit a new low in August. AAP bounced from this August low, but hit resistance near broken support and the falling 50-day SMA. Notice that a rising wedge formed and the stock broke the wedge line with a sharp decline the last four days. This break signals a continuation of the long-term downtrend and a move below the August low is expected. The indicator window shows MACD confirming with a bearish signal cross over the last few days. 

Follow me on Twitter @arthurhill  - Keep up with my 140 character commentaries.

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

Plan your Trade and Trade your Plan
*****************************************

This Tech Company Just Broke Out Of Bullish Pattern With Rising SCTR

While we've seen many indices, ETFs and individual stocks break out over the past several weeks, there are still many that are consolidating in bullish fashion and those, upon breakout, provide solid trading opportunities.  Enter DXC Technology Company (DXC).  Over the past two months, the S&P 500 has risen nearly 100 points (roughly 4%) while DXC has quietly consolidated and worked off short-term overbought conditions.  It's how the market works.  Leaders lead, consolidate, then lead again.  DXC's two month consolidation appears to have ended rather emphatically on Friday as you can see below:

The breakout of this textbook ABCDE ascending triangle pattern came on 2.2 million shares, or about 30% above the 50 day moving average volume of 1.65 million shares.  That higher volume confirms the pattern in my opinion and I would expect a measurement initially to the 90 level.  Support should be found at both price support just above 86 and the rising 20 day EMA, currently at 85.18.

The breakout also triggered a quick rise in the SCTR back above 70 and nearly into the top quartile of stocks.  Strong volume trends and a rising SCTR suggest bullish days ahead for DXC.

Happy trading!

Tom

RRG says you need to keep an eye on Small Caps!

The Relative Rotation Graph above shows the rotation of the three size indices that make up the S&P Composite 1500 index.

Although the S&P 500 large cap index ($SPX) is still clearly on the right-hand side of the RRG, making very small rotations close to the 100-level on the JdK RS-Momentum scale some interesting moves seem to be playing out on the left-hand side of the plot.

Continue reading "RRG says you need to keep an eye on Small Caps!" »

BlackBerry: Will This Rally Be Any Different Than The Last Several?

Blackberry's (BBRY) demise from 2008 through 2012 has been well documented and I'm not really interested in dwelling in that past.  More recently, however, BBRY has attempted on multiple occasions to clear price resistance in the 11-12 range.  Clearing such resistance would be technically significant and further the case for buying BBRY.  Here's the current technical view:

The blue circles above show that interest has definitely picked up in BBRY with volume the past six months much higher than at any point in 2016.  Also, the SCTR returning to the 90s is a very good sign as well.  But nothing is more important, in my view, than clearing that overhead resistance that's stymied the stock for four years.

Happy trading!

Tom