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

Utilities are OK but it's better to avoid EIX

by Julius de Kempenaer

The Utilities sector is acting as a safe haven for a lot of investors that need to park their money in the stock market because they cannot, or are not allowed to, hold all or significant amounts of cash when markets are going down. These are the periods when relative strength analysis (and thus Relative Rotation Graphs) can really set themselves apart. The above chart shows the RRG for the members of the Utilities sector against XLU as the benchmark. If you need to beat a benchmark it is Read More 

Don't Ignore This Chart

A Monster Momentum Shift in the 30-yr Yield

by Arthur Hill

It was not long ago that the 30-yr T-Yield ($TYX) was breaking above a three year resistance line and the outlook for yields was bullish (bearish for bonds). Admittedly, I was in that camp. The tables have turned as the 30-yr Yield failed to hold the breakout and sliced below its 200-day moving average. The chart below shows the yield breaking resistance at 32.5 (3.25%) in September. The breakout held for two months and then crumbled in December as the yield fell back towards 3% (30 on chart). The yield broke through the 200-day SMA in convincing fashion and the trend is now down Read More 

Don't Ignore This Chart

Railroads Start To Come Off The Rails

by Greg Schnell

One of the nice traits about the railroads is they are one of my indicators to help with general market direction. I have found that when the railroads start to underperform the $SPX, that is typically a confirming signal of broader market weakness. While I have been bearish for a while, the railroads starting to break the trend line of relative performance indicates that this will be a bigger than average breakdown. The PPO on the weekly chart is also breaking below zero. That doesn't happen very often.  Here is a longer term picture. Be careful out there! Read More 

Don't Ignore This Chart

Momentum Turns for Big Blue

by Arthur Hill

IBM is one of the worst performing stocks in the S&P 500 this year with an 18% decline year-to-date - and it could get worse. First and foremost, the long-term trend is down because the stock recorded a 52-week low in late October, the 50-day moving average is below the 200-day moving average and price is below the falling 200-day moving average. IBM plunged in October with a 25% decline from October 3rd to October 31st. We do not need a momentum oscillator to know that the stock was severely oversold in late October. IBM then worked off this condition with a bounce into early Read More 

Don't Ignore This Chart

Banks Are Bleeding Profusely

by Greg Schnell

The banking sector has been drilling holes in the bottom of empty Christmas stockings this year. All the big name US stocks are making new lows, but the real concern is the sheer size of the drop. Citi (C) is down 16% in just 2 weeks! BAC is down 25% from the annual highs! Wells Fargo (WFC) is down 28% this year! With the $SPX just slightly negative on the year, you can see the real pain for investors. While these banks are bleeding, there might be some hope showing up next week in the form of the Fed meeting. You'll notice BAC is plotted on the lower half of this chart. The Fed Read More 

Don't Ignore This Chart

Oh WELL... What Can I Say?

by Julius de Kempenaer

On the Relative Rotation Graph, the Real-estate sector is one of the better performing sectors vis-a-vis the S&P 500 index. The RRG above shows the rotation of all the stocks in XLRE against XLRE. This gives us a picture of the relative positions for all these stocks against XLRE and against each other. A few names stand out in a positive way. EXR, VTR, HCP, and WELL are all traveling higher on both axes and in a relative uptrend against XLRE. One stock, in particular, is sending very bullish signals. Read More 

Don't Ignore This Chart

Mind the Gaps in L Brands

by Arthur Hill

A long-term downtrend, two gaps down and a move back below the falling 200-day could spell trouble for L Brands. The stock has been quite volatile since summer, but the overall trend remains down. LB hit a 52-week low in early September, the 50-day SMA (not shown) is below the 200-day SMA, the 200-day SMA is falling and price is back below the 200-day SMA. The stock gapped above the 200-day SMA in mid November, but this gap did not hold as the stock gapped down twice. The second gap was back below the 200-day SMA. Even though LB bounced after this gap, the bounce again failed to hold Read More 

Don't Ignore This Chart

Is Shopify On Your Shopping List?

by Greg Schnell

Shopify appears to have all the makings of a stock ready for its next move. Relative strength is starting to rise, full stochastics are striding higher, the stock is about to break a 6-month resistance line and the PPO is resetting at zero! This high growth stock is really looking good. Considering how tight a stop under this week's low would be, this looks all set to rise. If it needs more time, I want out anyway. This stock is listed in Canada as well at SHOP.TO. Here are some of my videos from the last week. The Final Bar video discusses what to look for Read More 

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Southwest Airlines Reverses with a Gap

by Arthur Hill

Southwest Airlines (LUV) is in a long-term downtrend and the recent failure near the death cross points to further downside. First and foremost, the long-term trend is down because LUV hit a new 52-week low in late October and price is below the 200-day SMA. In addition, the 50-day SMA just crossed below the 200-day. After gapping down and hitting a new low, the stock bounced back to the 55 area in early December. This bounce, however, just retraced 50% of the prior decline, which is normal for a counter-trend bounce. The bounce hit resistance Read More 

Don't Ignore This Chart

Is This Stock About To Collapse?

by Greg Schnell

Canopy Growth Corporation (CGC) sits at support to close out the weekend. Is it about to collapse or surge? If you are interested in the most recent parabolic trading industry, marijuana legalization, it matters, as Canopy is widely seen as a leader in the group. For most investors, the sudden surge in August caught them off guard. Now would be the time to monitor CGC for a possible entry with a close stop. There is nothing on the chart that is a buy signal as of Friday, but there are lots of technical reasons to consider trading this stock in the near future. Read More 

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