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ChartSmarter Wednesday Game Plan 4/26/17

Markets recorded their second very strong gain Tuesday to begin the week demonstrating excellent follow through after 2 months of consolidation. The Nasdaq added .7% and the S&P 500 .6% and once again it was the Russell 2000 the best performer higher by .9%. The Dow which we rarely track although it is the most recognizable jumped 1.1% as many names in the concentrated index have well received earnings reports. The S&P 500 chart now is sniffing out a cup base trigger just above the round 2400 number and its chart has changed its complexion nicely over the last month. The Russell 2000 has broken through its 50 day SMA decisively after failing to do so twice previously in March. Bulls welcomed the laggards Tuesday as the as it was the defensive staples and utilities that lagged with the XLU the only major group to lose value on the session, albeit fractionally. Risk on has come back into vogue with the materials leading the way with the XLB jumping 1.6% and seems to be lifting off from the 52 level which acted as an anchor on the ETF with 8 of the last 11 weeks CLOSING with a 52 handle. Aluminum names contributed greatly to their gain with AA now higher by more than 15% this week so far. Notice it has traded between the round 30 and 40 numbers with 30 acting as support on 2/13 and 40 as resistance on 4/18. Technology was strong, an ongoing development, and once again it was the semis that did much of the heavy lifting. Below is the chart of ADI and how it appeared in our Wednesday 4/19 Game Plan and once again illustrates how candlesticks can be helpful in determining bottoms with good risk/reward scenarios.

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ChartSmarter Tuesday Game Plan 4/25/17

Markets started the week with a bang Monday as the Nasdaq jumped 1.2% and the S&P 500 rose by 1.1% and the Russell 2000 sprinted higher by 1.3%. The action was attributed to the French election over the weekend, and as one would prefer to see this type of move by something other than that the PRICE action must be respected. It is rare for an index to record a gap up but today the Nasdaq registered its 5th of 2017 already, and now stands just below the very round 6000 figure. The Nasdaq hit an all time high and the S&P 500 recouped its 50 day SMA. It was obviously a big positive for the benchmark to recapture its 50 day SMA, but there is still work to do as one wants to see that line hold for the rest of the week for starters. There was a risk on flavor today with the financials showing strength with the XLF the best actor advancing 2.2%. The ETF is still underneath its 50 day SMA and has work to do as it potentially looks to be forming the right clavicle in a bearish head and shoulders formation if it is unable to clear the important moving average. Other sectors gaining at least 1% included the industrials, technology, materials and healthcare. Utilities lagged by the XLU still added more than .5%. We did see some M&A activity in the healthcare group with BDX acquiring BCR and some of the names in that group were soft today. That may offer an opportunity in the near future to receive a nice entry on select names. Below is the chart of MDXG and how it appeared in our Monday 4/17 Game Plan. Today it recorded a bearish shooting star at almost 2 year highs, but on a longer term timeframe it is on a current 8 week winning streak. Put you alert in.

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Past and Present View of IP

Some encouraging signs are in motion regarding the economy las week. We witnessed some decent numbers being put up by the important transports (KSU price action Friday was an exception) as CSX jumped 9.4% for the week and cleared a cup base trigger of 50.41 Friday. NSC rose 4.3%, UNP by 3.3% and CP by 2% as well. Today we take a look into another group which can forecast strength or weakness going forward. Below is the chart of paper giant IP, and how it was presented in our Wednesday 3/29 Game Plan, which may be starting to play catch up with good looking peers PKG and KS which are both 3 and 6% off their respective 52 week highs, whereas IP sits 10% off its own. That has left a comparable attractive dividend yield of 3.51% however.

Stocks that can be bought as they pullback into the round numbers are IP. IP is a paper giant down 4% YTD and up 25% over last one year period and sports a nice dividend yield of 3.6%. Earnings momentum lower with losses of 5.6 and 2.2% on 2/2 and 10/27 after gains of .3 and 1.9% on 7/28 and 4/27. The stock is lower 5 of the last 8 weeks and now 13% off recent 52 week highs and notice Mondays hammer successfully retested the bull flag trigger near 49 from 12/1. It recorded a bullish hammer candle on 3/27 at very round 50 number and enter IP on pullback into it at 50.35. One can then add through 50 day SMA and then above 54.35 double bottom trigger.

Trigger IP 50.35.  Stop 49.

Taking a present look at the name the stock put in a stellar week jumping almost 7% in active volume. It found nice support near the very round 50 number too, which was resistance dating back to weeks ending 8/26-9/23/16. The bullish hammer candle from 3/27 was tested on 4/12-13 and held strong, a good sign. Finally respect the thrust back above the 50 figure on a weekly CLOSING basis as the week prior was the only week to finish below 50.

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ChartSmarter Monday Game Plan 4/24/17

Markets spent the vast majority of Fridays session in the red, but for the week put up a good showing. The Nasdaq responded well to its first back to back weekly losses this week adding 1.8% and recorded a bullish MACD crossover as well. One must admire the quick recapture of the 50 day SMA, which recorded just one CLOSE below last Friday. The S&P 500 gained .8% for the week, less than half of the performance on the Nasdaq, and in contrast has now finished below its 50 day SMA for a seventh consecutive day. Friday seemed a bit weaker under the surface that it did on paper with the utilities the clear leader as the XLU rose .5% and was only one of two major S&P sectors to gain. Perhaps nervousness of the French elections this weekend had investors looking for the sidelines. For the week however for those with a longer timeframe there was some real bifurcation taking place. Industrials and cyclicals both rose in the 2% neighborhood and energy declined by 2.2%. Other bullish notable mentions would be handed to the materials and technology groups that rose 1.7 and 1.5% respectively. One has to wonder if energy weakness is foreshadowing any economic vulnerability. I still remember reading one of Yamada's notes, and although I am strictly a chart guy I do recall her mentioning that their are 500,000 solar panels a day being put up and how she thought that would certainly have an impact going forward. Healthcare was the only sector to lose value this week but it could pay to monitor names that are beginning to behave better these days. Below is the chart of IONS and how it was presented in our Tuesday Game Plan this week. Friday it recouped its 50 day SMA and the last 2 weeks have gained a combined 13.5%, while the XLV fell the last 2 weeks although only by a very mild 1%.

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ChartSmarter Friday Game Plan 4/21/17

Markets were cheerful Thursday as the averages raced off to a good start and was later helped further by mention of tax reform. The Nasdaq rose by .9%, the Russell 200 by 1.2% and the S&P 500 gained .8%. The Nasdaq has the most positive chart out of the previously mentioned group as it is now ever so close to all time highs. The Russell recaptured its 50 day SMA and it and the S&P 500 now have sport good looking cup base formations. It has to be said that the market has absorbed a plethora of bad news and the bears had a slew of opportunities to move it lower, but the tech heavy index refused to break. Bend it did but one must come away impressed by the price action. Headed into Friday the Nasdaq is higher by 1.9% and the S&P 500 by 1.2%. Technology has benefitted by a nice showing in the semiconductor group and some name this week reacted well to earnings, notice I did not say reported, as obviously the reception the stock receives following the report is more important. A name that impressed this week after delivering was LRCX which has gained more than 11%. Even some of the names that have not kept pace with the overall robustness of the space have responded well this week including XLNX and ADI. Below is the chart of XLNX and how it was presented in our Monday 4/17 Game Plan. This name has long been mentioned as a takeover candidate, they never seem to be bought when talked about in that manner, and one should never make trading decisions solely upon that reason. The trigger was NOT hit but it serves as a good illustration how candlesticks are helpful in spotting potential trend changes. Another good development has been the transports trying to make a stand. CSX jumped 5.6% after reporting numbers but notice how it was unable to CLOSE above the very round 50 number, something it was unable to achieve on 3/7 as well recording a bearish engulfing candle. Today it registered a shooting star and perhaps a short term double top. Look for a finish above the 50 figure tomorrow.

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