Don't Ignore This Chart

First Solar (FSLR) Spots Some Sunshine

First Solar (FSLR) has been beaten down for a while. Last week finally delivered a huge up day with lots of volume accompanying the move. Some of that volume was short sellers covering but the chart is getting ready to test breaking through a year long trend line. The SCTR is also pushing above 50 for the first time in a year. The relative strength in purple is still weak so that is a negative. We would like to see this starting to make three month highs. Below the chart the volume candles are starting to perk up recently. Perhaps the down trend is dying and the stock is about to get its day in the sun.

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Merck Makes a Move $MRK

Merck is showing signs of life as it bounces off a breakout zone and the Stochastic Oscillator turns up. The overall trend is up because the stock hit a 52-week high in February and is above the rising 40-week moving average. After a breakout surge earlier this year, the stock fell back to the breakout zone with a classic throwback. The recent upturn in the Stochastic Oscillator suggests that the pullback is ending and the bigger uptrend is resuming. 

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

Plan your Trade and Trade your Plan
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Did Nike Bottom on Friday?

As technicians, we look for prior price resistance to act as solid support once the resistance has been broken.  That principle came into play on Nike, Inc. (NKE) as it tested a major price support just beneath 54.00 on Friday.  NKE gapped down in the latter part of March and closed at 53.92 on March 22nd on extremely heavy volume.  That set a major price support level as NKE had not closed beneath 54.00 (except for that March 22nd close) since breaking out above that level in the second week of February.  The following shows key support running through the 54.00 level.  Check it out:

A close beneath 53.75 would be a signal worth paying attention to.  Relative support (vs. the S&P 500) near .0224 is being challenged after a steep selloff.  Breaking down beneath both the relative support level and the absolute price support level - all on high volume - would likely set NKE up for further deceleration.  Stay tuned.

Happy trading!

Tom


 

Checking In On The Bond Yields

There are many opinions in the market and that is what makes the market so interesting. Without question one of the perplexing areas of the market has been the 10 Year Treasury Yield for a lot of investors. With the Federal Reserve looking like it wants to increase interest rates at the next meeting, I thought it would be timely to check in on the Bond Yield chart.

While the US Yield has been dropping since the first of the year, it has caught a lot of the major participants off guard. But US investors are not alone. The British and Japanese charts also sport lower yields since the first of the year. Only Germany is holding a higher yield in April over January 1.

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Hartford Surges off Support with 7-day Move

Hartford (HIG) is a big insurance concern and part of the Insurance SPDR (KIE), which is one of the best performing industry group ETFs over the last six months. The stock surged from late August to mid November and continued higher at a slower pace from January to March, hitting a 52-week high in mid March. Notice that the stock established support in the 46-47 area over the last five months and surged off support with an advance the last seven days (and counting). It may seem short-term overbought, but this surge off support shows strong and sustained buying pressure. The indicator window shows MACD turning up and moving into positive territory. This just means the 12-day EMA moved above the 26-day EMA.

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

Plan your Trade and Trade your Plan
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Regeneron Bounces within a Massive Base

Regeneron has gone nowhere since February 2016, but recent volume bars suggest that this may be a massive base. The stock surged off the 325 area with big volume in November. After falling back into January, the stock held above the October low and turned up the last 14 weeks. Notice that upside volume far outpaced downside volume two of the last five weeks. This stock appears to be under accumulation and a breakout at 400 would target an assault on range resistance. Careful this week because the Regeneron reports earnings on May 4th. 

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

Plan your Trade and Trade your Plan
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Bank Of America (BAC) Is Technically Concerning

The banks have been rocking as they have been surging since last summer. In the last few months they have paused their rally. Since they announced earnings, they have not really rallied. This week had a nice pop but the real question is can they continue? While history can be a potential guide, it is important to realize the perilous clues on the chart as they form. Whether they play out is yet to be seen, but this is a situation that shows up near tops. 

Bank of America (BAC) has some concerning technical signals. Lowering momentum on the higher peak is a warning flag. Seeing that little negative divergence is always a conversation starter. However, now the MACD has gone below zero. If it rolls over under the zero line, this is a typical loss of momentum on the right shoulder of a topping pattern. While we don't know if it will follow through, this setup allows us to realize the potential for a move lower when we least expect it. Notice the MACD has slowed slightly while still below zero as you can see in the zoom box. It shows as a lower histogram.

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Exact Sciences Corp Posts Solid Results, Completes Right Side Of Cup

On Thursday morning, Exact Sciences Corp (EXAS) was the #1 percentage gainer on the NASDAQ, rising nearly 26%.  While that's a massive move by any measure, I doubt that the move higher in EXAS has ended.  If you look at a weekly chart, you'll see that yesterday's gain in EXAS actually completes (or nearly completes) the right side of a very bullish long-term cup with handle pattern.  Take a look:

Those big gains yesterday simply took EXAS back to where it was in early 2015.  I'd expect to see consolidation over the next several weeks, but ultimately a breakout that carries the stock to 55 based on its measurement.  Make sure the volume confirms on a breakout of its 2015 high.

Quarterly results for EXAS were released Thursday morning and they showed that the company had handily beaten both its revenue and earnings estimates, setting the stage for yesterday's advance.

Happy trading!

Tom

Dell Technologies (DVMT) Pushes Up Out Of Consolidation

Dell Technologies (DVMT) was a recent IPO out of Dell and EMC. Here is the chart. With the technology stocks trading so well, this chart continues to climb.

The volume is a little obscured by the 40 Million share candle. The average daily volume is a little clearer in the zoom box on the right, showing around 1.4 million shares. The momentum is starting to turn up again. 

Good trading,
Greg Schnell, CMT, MFTA.