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StockCharts Blogs - Don't Ignore This Chart! |
While the stock market moved higher the last two weeks, Lowe’s (LOW) failed to break above resistance at 22 and showed relative weakness. A potentially bullish ascending triangle is taking shape, but a breakout is needed for confirmation. Conversely, a break below this week’s low would be bearish for the stock.
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A look at the Market Summary page on Wednesday, September 16th, at 11:14AM ET shows a bullish start for some key sector SPDRs. The Materials SPDR (XLB), Consumer Discretionary SPDR (XLY), Energy SPDR (XLE) and Financials SPDR (XLF) are all up over 1% in early trading. At the top of this page, user can change the settings to show intraday or end-of-day data
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The iShares Telecom ETF (IYZ) is challenging neckline resistance of an inverse head-and-shoulders pattern. The head-and-shoulders represents a big consolidation and the break to new highs is positive. However, declining volume on the Aug-Sep advance is a concern.
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The Point&Figure chart for the Gold ETF (GLD) is bullish with an upside target at 105. PnF Charts at Stockcharts.com show bullish or bearish price objectives above the chart on the left. GLD broke above its prior highs and clearly shows strength.
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The British Pound ETF (FXB) came across the Commodity Channel Index scan as the indicator surged above 100. While some may consider CCI overbought when above 100, it is also a show of strength when CCI moved from -100 to +100 in less than two weeks.
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The Energy SPDR (XLE) broke above wedge resistance with a big gap on Tuesday, but formed a shooting star candlestick on the day. Notice the spike and failure to hold above 54 intraday. Resistance in the 53-55 area is also confirmed by a bearish engulfing in late August.
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Net New Highs for both the Nasdaq and the NYSE remain positive. Net New Highs equals new 52-week highs less new 52-week lows. The last dip into negative territory occurred in early July. With Tuesday’s surge, Net New Highs on the NYSE hit +151 and Net New Highs on the Nasdaq reached 70. You can click the image to see the details.
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The cup with handle formation is a powerful continuation pattern. A prior uptrend must exist in order to rely on the cup with handle pattern. Below are two examples of cup with handle patterns that show the cup formation and the powerful breakout moves. In the case of ADSK, we've recently seen a retracement to the breakout area, which provides another entry point for the trader. KOG was highlighted in our Chart of the Day section less than two weeks ago while still in the handle part of the pattern. The breakout moves in both cases were explosive. Check these two out:
For more information and education on cup with handle patterns, check out the Chart School right here at StockCharts.
After a big advance from March to June, the Market Vectors Steel ETF (SLX) formed a classic cup-with-handle pattern. This is a bullish continuation pattern that would be confirmed with a break above rim resistance. Conversely, a break below the August lows would call for a reassessment.
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Lumber Continuous Futures ($LUMBER) did not have a good August. Lumber formed a lower high in early August and moved lower throughout the month. As a key component in housing, lumber should be watched for clues on the homebuilders and the economy. Other futures contracts available at Stockcharts.com include $ALUM, $GASO, $GOLD, $HOIL, $LUMBER, $NATGAS, $SILVER and $WTIC.
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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
