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StockCharts Blogs - Don't Ignore This Chart! |
From the PnF scans comes Sherwin Williams (SHW) with a clear break below the May lows. On the PnF chart, you can see the number 5 to denote the start of May and then two reaction lows. After the number 6 (June), SHW formed another column of O’s that broke below the prior two lows. Also notice that SHW broke the bull support line.
After surging on good volume, FedEx (FDX) hit channel resistance around 57. Notice that FDX peaked in early May and then worked its way lower the last eight weeks. This series of lower lows and lower highs defines the channel, which is also an 8-week downtrend. Look for a breakout to reverse this trend.
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The DJIA Bullish Percent Index ($BPINDU) moved above 70% in June and remains at lofty levels. Mid December and early January were the last two occasions above 70%. Currently, 73% of the Dow stocks (30) are on Point & Figure buy signals. Even though this is technically bullish, an advance is usually getting overbought when this indicator exceeds 70%.
While the S&P 500 took a hit in June, Hewlett-Packard (HPQ) managed to hold its breakout and stay relatively strong. HP broke triangle resistance in early June. Broken resistance then turned into support the last three weeks. Also notice that the price relative moved higher throughout June.
A static shot of the dynamic yield curve reveals a curve steep enough to temp a skateboarder. As this curve shows, interest rates start low at the short end and rise as the maturities lengthen. Typically, a steep yield curve reflects loose monetary policy designed to stimulate the economy and help banks.
The Dow Industrials is testing support around 8200. A key tenet of technical analysis is that broken resistance turns into support. After breaking 8200 in early May and this level turned into support twice in May. With a sharp decline in June, the Dow is once again poised for a test of this level.
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UPS is a key part of the Dow Transports and perhaps a leading indicator for the stock market. Notice how the price relative (UPS:$SPX ratio) bottomed ahead of the stock market in March. UPS started showing relative strength before the actual market bottom. Most recently, the price relative peaked in April and UPS has been showing relative weakness the last two months.
After surging in March-April, SW Airlines (LUV) went into corrective mode with a falling wedge in May-June. This wedge is still falling, but volume on up days is starting to increase. The bounce in early June occurred on above average volume and Wednesday’s volume was the third highest of the month.
The Nasdaq 100 ETF (QQQQ) formed a doji on Thursday to signal indecision at support. Doji look like plus signs because there is little change from open to close. In addition, notice that QQQQ closed in the middle of its high-low range. The candlestick looks like a small plus sign (+).
This blog contains charts that we think are 'interesting' from a technical analysis perspective. These charts are presented for educational purposes only. We are not making any buy or sell recommendations here. Terms of Service
