Don't Ignore This Chart

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About this blog: The blog contains daily articles with intriguing or unusual charts selected by one of our Senior Technical Analysts, along with a short explanation of what exactly caught their attention and why they believe the chart is worth noting.

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Don't Ignore This Chart

First Solar Starts To Shine Under A New Year

by Greg Schnell

First Solar has been a volatile stock. When it trends well, it can make incredible runs. However, the stock had been dropping into the fourth quarter.  One sign of enthusiasm this week off the lows was that First Solar made a higher low in December than in August, unlike much of the market. The price action this week has moved almost to the top of the October to December range.  With great price action like that, this stock looks ready to shine. There is still a 15% upside just to get to the 40 week moving average, but the overall relative strength shown by the surging SCTR Read More 

Don't Ignore This Chart

NIFTY (India) As An Alternative For SPY (US Stocks)

by Julius de Kempenaer

With the US stock market declining investors (may) need to look for alternatives in order to preserve capital. Sure enough, there are good opportunities in the US with bonds, IEF is doing very well, and cash is a very viable alternative if you do not "need" to be invested. If you are in a position where you do need to be invested in stocks or you want to keep an allocation to stocks in your portfolio, even if it is an underweight position, you might need to look outside the US for alternatives. The Relative Rotation Graph above Read More 

Don't Ignore This Chart

The Relationship between Trend Direction and Risk

by Arthur Hill

With December complete, chartists can now examine monthly close-only charts for an assessment of the long-term trend and stock market risk. Spoiler: it is not a pretty picture.   Before looking at the chart, let's review the concept behind Price Channels. Chartists can use Price Channels to mark the high-low range over a given lookback period. For example, the 12-period Price Channel on a monthly close-only chart shows the high-low range for closing prices over the previous 12 months, which excludes the current month's high-low range. A monthly close above the Price Channel means the Read More 

Don't Ignore This Chart

A Summary of 2018

by Greg Schnell

It was a tough year around the globe. The indexes were hit with a downdraft. Notice the NASDAQ 100 finished marginally in the red. Two bright spots were Brazil and India; the little bar in India at 5.91% looks small, but North American markets would have been happy with a positive return like that amidst the global selling.  Commodities had a tough year. Gold shone in the 4th quarter, but even it couldn't quite swing positive. The rare earth metals sold off 50%. What's interesting about the rare earth metals is all of the bullish perspectives starting 2018 Read More 

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Sector SPDRs Firm with a Few Piercing Patterns

by Arthur Hill

Stocks rebounded last week and recovered part of their losses from the prior week. Long black candlesticks formed the week before Christmas and most sector SPDRs recovered with long white candlesticks the following week. A black candlestick forms when the close is below the open, while a white candlestick forms when the close is above the open. Chartists can compare the last two weekly candlesticks to find the sectors that recovered the most. Before looking at a weekly candlestick pattern, note that the S&P 500 SPDR (SPY) is in a long-term downtrend and almost all sector Read More 

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When Technicals Talk And Fundamentals Fail

by Greg Schnell

With the exception of Brazil and India, the monthly charts are broken worldwide - and the speed of the drop since the break has been alarming. Come 2019, the charts will need to do a lot of work to rebuild a constructive shape. What are we looking for? Let's start at the top. In a bull market, the full stochastic indicator usually stays above 50. With Friday and Monday left to improve the final reading, the chart looks perilous. Note that big bear markets start with a break below and can last one or two years. A move back above 50 on the full stochastic may be slow, but it Read More 

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Okay, So You Rallied 1000 Points...? That Don't Impress Me Much.

by Julius de Kempenaer

Yesterday, on boxing day, the Dow jumped 1000 points from its 52-week low which, coincidentally, was also set yesterday. Never a dull moment. But, what does it mean? Looking at the weekly chart above, at least IMHO, it means only a (small) recovery of the damage that has been done since the start of October when $INDU almost touched 27.000. However, it is nowhere near enough to change the structure of the market back to bullish. The break below support at 23.500 last week confirmed the end of the series of higher highs followed by higher lows Read More 

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A Long-term Breadth Signal Triggers

by Arthur Hill

AD Percent for the S&P 500 dipped below -90% on Monday and this was the sixth reading below -90% this year. AD Percent equals advances less declines divided by total issues. Thus, if 25 stocks advance (5%) and 475 stocks decline (95%), AD Percent equals -90% ((25 - 475)/500). The chart below shows the S&P 500, S&P 500 AD Percent and the S&P 500 AD Line. The index fell 11 of the last 14 days and recorded new lows the last four days. AD Percent joined suit with negative readings 13 of the last 14 days. Thus, AD Percent was negative even when the index closed higher on Read More 

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A Rare Extreme for the Russell 2000

by Arthur Hill

The Russell 2000 peaked at 1740 in mid August and fell below 1300 over the last 15 weeks. The index is now down 11 of the last 15 weeks and extremely oversold. Even though the long-term trend is clearly down, this extreme oversold condition could give way to a counter-trend bounce. The chart shows the Russell 2000 falling below its 40-week moving average in mid October and recording a 52-week low in mid December. The breakdown and new low confirm the long-term downtrend.   The indicator windows show the 15-week Rate-of-Change and 15-week RSI. I chose 15 periods Read More 

Don't Ignore This Chart

P&F Charts Plummet in Triple Bottom Breakdowns

by Greg Schnell

With the ongoing market turmoil, it seems that the P&F charts are plummeting. This style of charting does a great job of clearly illustrating support - you can see when price break downs as support is broken. The chart below demonstrates how well the price has been supported at 2600. The second-to-last column of O's briefly broke below the two prior lows, forming a pattern called a triple bottom breakdown. After a small bounce up, the price failed to make a higher high. When the final column of O's formed, the price plummeted lower.  Read More 

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