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StockCharts Blogs - Don't Ignore This Chart! |
With stocks opening strong and then moving sharply lower, the intraday bearish engulfing scan is filling up quite quickly. Of note, the Regional Bank SPDR (KRE) has a bearish engulfing in play on Thursday afternoon. In fact, notice how the ETF pretty much engulfed the last 11 days of trading and broke below its mid January low.
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The Amex Airline Index ($XAL) lagged the market throughout 2011, but may be poised to lead with a breakout in 2012. The P&F chart below is a classic three box reversal chart with each box representing 50 cents. Notice that the current X-Column broke above the last three to forge a Quadruple Top Breakout with an upside price objective at 47.50. You can read more on P&F patterns and price objectives in our ChartSchool.
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A look at the StockCharts Technical Rank (SCTR) movers shows Quest Diagnostics with a big move (+37) on Tuesday. On the price chart, DGX broke ascending triangle resistance with a surge in volume today.
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QQQ opened flat, surged, dipped and then recovered to close basically unchanged on the day. As a result, the ETF formed a long legged doji, which shows indecision on the day. Overall, the trend remains up as the ETF holds above the December trendline. A break below this trendline would be the first sign of weakness.
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While the German DAX Index ($DAX) and the French CAC Index ($CAC) languish well below their 2011 highs, the DJ Ireland Index ($IEDOW) shows strength with a break above its highs. Ireland was one of the first countries to get into trouble, but it appears that the tough medicine is working as the stock market shows relative strength now.
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The Medical Devices iShares (IHI) has been moving higher since mid December and is now challenging its late summer high. Also notice that upside volume picked up over the last 4-5 weeks. While a breakout would be bullish, the ETF is getting overbought after a 13+ percent advance off its mid December low.
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Stocks were largely higher on Wednesday with the technology sector leading the way. As the Sector Market Carpet shows, three of the top five performers in the technology sector come semiconductor group: Linear Tech (LLTC), Altera (ALTR) and Texas Instruments (TXN).
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John Murphy’s industry group PerfChart shows the Banking Index ($BKX) and the Biotech Index ($BTK) leading the market higher with the biggest gains. Also note that the Gold and Silver Index ($XAU) and the Broker Dealer Index ($XBD) are strong this year.
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Spot Unleaded Gasoline ($GASO) found support in the 2.45-2.50 area from September to December and then broke resistance with a surge the last three weeks. The breakout is holding, but $GASO stalled this week and fell rather sharply on Thursday. A move back below 2.62 would negate the breakout. Believe it or note, this breakout is positive for stocks because $GASO and the S&P 500 are positively correlated.
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The US Oil Fund (USO) started the year strong with a surge above 39, but cannot hold above this level as the ETF plunged over 1.5% on Thursday. USO was also turned back in the 39-40 area in November and December. In the indicator window, note that Spot Light Crude ($WTIC) has had trouble staying above $100 since mid November. Today’s decline in $WTIC is not yet reflected on the chart.
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