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StockCharts Blogs - Don't Ignore This Chart! |
The Gold Miners ETF (GDX) is in for a big test as broken resistance turns into support. GDX broke resistance around 41-42 with a big surge in September. This level turned into support, and held, in early October. After a sharp decline the last two weeks, GDX is once again testing this important level.
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Even if you do not trade Fidelity Funds, the Fidelity Funds Carpet can be useful for providing an overview of market action. All stock index funds, domestic equity funds and international funds are down over the last 10 days (lots of red). The only green (gains) can be found in the bond funds.
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The Major US Markets Perfchart shows the Russell 2000 ($RUT) leading the way lower over the last two weeks. Notice that the Russell 2000 has not even been positive (above 0%) over the last 10 days. In contrast, the other major indices were in positive territory at some point over the last 10 days.
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Two big bearish engulfing patterns solidify resistance around 28-28.5 for Juniper Networks (JNPR). JNPR first established resistance at 28 with a doji. A few weeks later, the stock opened strong and closed weak to form its first high-volume bearish engulfing. After a pullback and second attempt at 28.5, the stock again formed a bearish engulfing with even higher volume. This shows lots of supply around 28-28.5. Read more on candlestick reversals in the chart school.
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After a decline the last eight days, Intel (INTC) is showing signs of firmness near a support zone. First, notice that the decline retraced 62% of the prior advance. Second, notice that broken resistance turns into support. Third, notice that MACD has a bullish divergence working. A break above 20.5 would reverse the eight day downtrend.
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The Bollinger Bands are contracting as Paychex (PAYX) trades within a narrow range this month. First, you can see the bands narrowing significantly this week (blue arrows). Second, the Bollinger Band Width indicator is trading at its lowest level in over four months. A volatility expansion often follows a volatility contraction.
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Looking across the P&F scan page on Thursday, I came across Lockheed Martin (LMT) with a quadruple bottom breakdown. Actually, this is a quintuple bottom break down. After four bounces off support, LMT broke through on the fifth try. Based on traditional P&F targeting, the downside projection is to around 62.
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Even though the Materials SPDR (XLB) is challenging resistance from the September highs, Chaikin Money Flow remains in negative territory. In fact, CMF has been negative throughout October. This shows underlying weakness in the current advance. With XLB stalling near its September highs the last five days, a break below Tuesday’s low would argue for a pullback.
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A number of chart features are coming together to mark support around 15 for KB Home (KBH). First, the decline retraced 62% of the prior advance. Second, broken resistance turns into support. Third, the stock firmed the last three weeks. The only remaining wild card is the direction of the triangle break.
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Much has been make about Dow 10,000 this week, but technicians may want to focus about 500 points higher instead. The chart below shows Volume-by-Price for the Dow Industrials. Notice that the longest bar is around 10500-11000. This represents a potential resistance zone in the coming weeks or months.
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