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ChartSmarter Wednesday Game Plan 6/28/17

They say its not where you start but where you finish. Markets today displayed hallmark bearish traits going out hard upon their lows. The market has felt heavy and bulls and bears can paint a picture fitting their biases. The bull can say the S&P 500 is just 1% off recent all time highs while the bear will conclude for that reason alone it still has that much more run to fall. By the day it is getting harder for bulls to defend the action in the tech arena. Since the 6/9 bearish engulfing candle on the Nasdaq trade has become wide and loose, another hallmark bearish characteristic. Today that benchmark felt the pain the most with a drop of 1.8% and we like to monitor the candlesticks. We spoke about the engulfing candle on 6/9 and yesterday registered a bearish counterattack name. Of course price action is the most important guide but when a couple candles begin to occur in close succession it speaks loudly. The Nasdaq, S&P 500 and Russell 2000 all are still just above their rising 50 day SMAs and until those lines are broken the bulls still maintain the benefit of the doubt. Looking at individual groups today it was just the financials that managed to gain of the major S&P sectors with the XLK rising a decent .5%, a respectable move considering the overall tape Tuesday. One would be wise to keep a close eye on the financial play below CBOE. Here is how the name was presented in our Wednesday 6/21 Game Plan and today it inched above the very round 90 number and a CLOSE above 90.40 could see a move to the very round par number.

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ChartSmarter Tuesday Game Plan 6/27/17

Markets once again clung to the UNCH line Monday, with the exception of the Nasdaq which fell .3%, to start the week and I was a bit cautious as the Nasdaq flipped from decent early gain to a loss and one which felt like it could have easily been a 1-2% down session. I thought technology had righted the ship last week, but perhaps it needs to prove themselves a bit more. One should remained concerned until the highs of that bearish engulfing candle from 6/9 is CLOSED above. The S&P 500 chart is a bit tamer, and not as wide and loose, as the tug of war continues with its bull flag. The tight weekly closes the last 4 have to keep the bulls feeling optimistic. With this benchmark the concern is the amount of time things are taking to develop. Sure one can argue that it is consolidating at all time highs, but as there are price stops, remember that there is such a thing as time stops too. Moves that take to long to break above should be monitored very closely with a bit of skepticism. Looking at individual sectors Monday it was a little suspicious with the utilities and staples among the top 3 best performers, with the financials rounding out the top 3. Energy and technology lagged as the semiconductors seem to have run out of steam. Last week healthcare was a firm leader and names in the space should be watched to see if any follow through occurs. Below is the chart of LNTH and how it appeared in our Thursday 6/22 Game Plan. It is a good example of not taken a leader off your radar, as we profiled the name previously to enter above a bull flag trigger which never panned out. Monday the stock rose more than 4% after a recent initial touch of its 50 day SMA after a recent breakout above a cup base trigger of 14.30 on 5/3.

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Past and Present View on ZG

The internet has had plenty of headlines recently with AMZN looking to takedown WFM a peek into other names in the group can be potentially profitable. ETSY has gained ground 6 of the last 8 weeks since jumping off the round 10 number in early May and three of those weekly gains were very strong, adding 8.4, 18.2 and 11.5% the weeks ending 5/5, 5/19 and 6/23. Today we focus on ZG and directly below is how it was presented in our Tuesday 5/23 Game Plan and then we take a current view. We focus only on PRICE action here, but perhaps the stock is acting well on the back of some good homebuilder news and could be a sign of a strengthening economy.

Stocks that can be bought as they pullback toward round numbers are ZG. ZG is an internet play higher by 14% YTD and 47% over last one year period. Earnings have been mixed with gains of 10.3 and 5.6% on 5/5 and 11/2 and losses of 7.6 and 5.5% on 2/8 and 8/5. The stock registered a strong 6 week winning streak ending between 3/31-5/5 which rose 28% and the week ending 5/5 jumped almost 14% in double average weekly volume taking out round 40 number which had been resistance dating back to weeks ending 11/21/14, 2/20/15 and 8/5/16. Should move toward round 50 number which stopped stock cold weeks ending 7/25-8/1/14. For now enter ZG on pullback toward round 40 number at 41.25. Could go on to fill gap from 5/4 session just below.

Trigger ZG 41.25.  Stop 38.40.

Taking a current look at ZG it is now higher by 39% YTD and 47% over the last one year period. The stock is higher 10 of the last 13 weeks including double digit gains the weeks ending 5/5 and 6/23 which jumped 13.8 and 11.2% respectively. We previously discussed how the very round 40 number was resistance November '14, February '15 and August '16 before bursting above the week ending 5/5/16 in more than double active weekly volume gaining nearly 14% and has not looked back since. This week was its first weekly CLOSE above the very round 50 number. Looking back it traded above intraweek almost 3 years ago the week ending 8/1/14 but was unable to finish above. One can now add to a long weekly cup base trigger of 51.52.

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ChartSmarter Monday Game Plan 6/26/17

Markets registered a lackluster week with with the S&P 500 and Dow adding .2 and .1% respectively, but the Nasdaq is seemingly quickly putting behind it the big move lower on 6/9. It rose 1.8% this week, the clear winner, and is now higher by 16.4% YTD compared to the S&P 500 which has moved up by 8.9%. The S&P 500 has now CLOSED the last 4 weeks very taut, all within just 7 handles of each other, and this type of action normally resolves itself in the direction in which it came into, obviously higher. The Dow has been trading tight as well and is on its first current 5 week winning streak of the year, but notice its last 4 have gained by just a combined 1.5%. It has performed well since moving above the very round 20000 number after hitting a roadblock there the 6 weeks ending between 12/16-1/20. One of the bigger stories this week that did not get much attention was the move in FDX. It registered a nice reversal Wednesday following an earnings report, and talking about the round numbers notice the excellent action POST breakout from a 201.67 cup base trigger taken out on 6/2 (the round 200 number prior only held up on a CLOSING basis just one session on 12/13/16). The stock is on a 5 week winning streak gaining more than 13% and sits 1% off all time highs. This name is by far the largest component in the IYT, by almost 14%, and the ETF is holding its break above a double bottom trigger of 167.87 originally taken out on 6/2. The move speaks to a healthier economy, and is vastly outshining peer UPS, with FDX higher YTD by 16% as UPS has slipped 4% so far in 17 (the pair trade was pointed out to me by @AriWald). AMZN is not yet taking over the world of transport. On a weekly basis it was hard to ignore the bifurcation with just two of the nine major S&P sectors (telecom and real estate I tend not to look at) with healthcare and technology up 3.6 and 1.9% via the XLV and XLK and financials and energy souring down 1.6 and 2.9%. Below is the chart of RGEN, not to be confused with RGEN, and how it was presented in our Thursday 5/25 Game Plan. The 31 year old healthcare play hit an all time high Friday and for the week sprinted higher nearly 16% in the best weekly volume in one year. It also recorded its first weekly CLOSE above the round 40 number in almost 2 years dating back to the week ending 7/24/15 and is now just above a 42.58 long weekly cup base trigger.

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ChartSmarter Friday Game Plan 6/23/17

Markets showed some muscle Thursday, but a late mild selloff washed away gains with the Russell 2000 outperforming higher by .4%, and was even better than it looked as its greatest weighting lies within the financials which were weak today. The Nasdaq and the S&P were essentially UNCH. Tomorrow will be an important day, especially for the S&P 500 as it needs to establish a clean break above this bull flag we have been mentioning for the last few days. Its uptrend would still be well intact, but some short term weakness could transpire and a move to the upward sloping 50 day SMA would not be out of the ordinary. That important line lies about 1.5% from current prices. On a weekly basis heading into Friday the S&P 500 is higher by .1% and a CLOSE here tomorrow would be a fourth consecutive very taut weekly close. The Nasdaq is behaving better this week as it has risen 1.4% thus far. At the expense of sounding like a broken record healthcare once agin led the way on a sector basis with the XLV advancing 1%, and for the week is higher by 3.7% through Thursday, enjoying its best weekly gain since the week ending 11/11/16 which exploded higher by 6%. It looks assured to keep current a 5 week winning streak and has made a clear break above a 3 week tight pattern, with the last 3 all CLOSING within just .27 of each other, and weekly volume already is above average with one session still remaining. Below is the chart of Q, and how it appeared in our Monday 6/12 Game Plan, in the white hot group and it is now on an impressive 6 session winning streak and today cleared the very round 90 figure which is important as names that achieve that feat often go on to trade to par and beyond. It took out a bull flag trigger as well and is higher by 4.3% heading into Friday. The push back into tech, industrials and healthcare has overshadowed the fact that the staples, the worst actor Thursday with the XLP down .5%, are looking at a potential third consecutive weekly loss. The prior two weeks fell 1 and 1.3% and this week is lower by .7% so far. The top 10 holdings in the ETF were lower Thursday with COST still feeling the AMZN hangover and now off a quick 13% from the double top at 183 recorded the weeks ending 5/5 and 6/9.

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