Celgene (CELG) has not made much headway the last twelve months, but the overall trend is up and the current consolidation looks like a bullish continuation pattern. Taking a step back, notice that CELG doubled from the April 2014 low to the July 2015 high (~70 to ~140). The stock then retraced around 61.18% of this advance with a 30+ percent decline into January 2016. Even though a 30+ percent decline seems long-term bearish, the retracement amount is actually normal for a pullback within an uptrend. Signs of a long-term uptrend are emerging as the stock bounced off the 95-100 area four times from January to October, and forged higher highs in August and November.
After long basing periods, breakouts can be very significant technical events that lead to powerful gains. Those invested in or trading Costco (COST) are hoping last week's breakout signals a nice advance in the months ahead. Three months ago, COST bulls successfully defended key price support and the rally that ensued finally broke major price resistance. Check out the chart:
The last two weeks did see increasing volume to confirm this latest move higher. The two key levels of support are now price support near 169 and the rising 20 week EMA, currently at 159.53. Seasonally, February and March have been decent months for COST over the past 20 years so historical performance shouldn't be a hindrance at all.
Mohawk Industries (MHK), a flooring designer and manufacturer, just reported quarterly earnings that exceeded Wall Street consensus estimates. The initial reaction in after hours is very bullish as MHK has been consolidating in sideways fashion for the better part of a year and the after hours price would constitute a significant breakout. Here's a look at the current technical picture:
MHK has been bouncing off rising 20 day EMA support and its SCTR rank has been trending higher since the stock put in a double bottom in early November. Volume trends are strong and tonight's earnings beat could very well be the catalyst to jump start a nice rally here.
Expeditors International of Washington (EXPD), a logistics services provider, is part of the Dow Transports and the Industrials SPDR. The stock caught my eye because it is in a long-term uptrend and recently pulled back to a potential reversal zone. First, the long-term trend is clearly up because the stock hit a 52-week high in early December. Also notice that the 50-day EMA is above the 200-day EMA and the stock is above its rising 200-day EMA.
The Oil & Gas Equipment & Services SPDR (XES) surged to 52-week highs in November and early December. It is clear after this surge that the bigger trend is up. First, the 40-week Slope turned positive in late July and remains positive. Second, the ETF broke out of a large triangle consolidation in late November. Third, 52-week highs happen in uptrends, not downtrends.
Advanced Micro Devices (AMD) was one of the best performing stocks in 2016 and the bullish pattern that's printed in the first five weeks of 2017 suggests the rally hasn't ended just yet. One bearish development today was that AMD broke out above its late December high on an intraday basis, accompanied by extremely heavy volume, only to fail to hold it into the close. Those late day sellers may be setting AMD up for some short-term weakness back to test its rising 20 day EMA to complete a handle. Here's the current technical picture:
The rising 20 day EMA is just beneath 11.00 and could serve as solid support if a handle prints during a period of profit taking. The RSI has reached overbought territory at 70 and Thursday's failure on its breakout attempt could be a short-term signal of further selling before a breakout confirms. AMD certainly had the volume to confirm today's breakout as volume the past two days has been surreal (blue circle above). Despite the failure of AMD to breakout on an absolute basis, the stock did breakout relative to the benchmark S&P 500. AMD remains very strong technically.