Chartsmarter Insights

17 Jan 2024

Technology Sector Review: 1/18/24

By |2024-01-17T18:17:27-05:00Wednesday|

Stock Chart Is Chill: In the communication services space, to me, it is chock full of tech names in the internet arena, one of the most visible names that many focus upon is NFLX. Others that demand your attention are stocks like GDDY, which sported nice relative strength on Wednesday adding more than 2% on a soft tape. It is within a stone's throw of a cup base pivot of 107.92, and after a 20% WEEKLY advance the first week of last November it is higher by another 20%. Notice how its cup base found some support right at the very round par number. DASH also bounced off the very round par number today, just 2 sessions after a dreaded doji candle. Below is the chart of NFLX, perhaps the most recognizable name in the sector. As the saying goes, "NFLX and chill", this name is doing just that above its rising 50-day SMA and the very round 500 number. Its MONTHLY chart is behaving well after three straight very taut CLOSES between last June-August, with the last 2 months' doji candles. It is a good sign it shrugged them off. It is now all about the very round 500 number and when that may be taken out. 

16 Jan 2024

Financial Sector Review: 1/17/24

By |2024-01-16T16:21:38-05:00Tuesday|

Regional Differences:   Regional banks are trying to rid themselves of the dirty aftermath of the SIVB collapse. The performance, via the KRE, over the last 3 months, gaining 17%, is a good start. That looks good when you compare it to the advance of 10% from the overall finance group with the XLF. But obviously, this is a small sample size. If we look back over one year the XLF has risen by 3% as the KRE has dipped 18%, not a typo. Additionally, the KRE is much further from its 52-week highs, now 24%, with the XLF only 2% from its annual peak. It remains to be seen if this nascent strength in the regional banks will continue but if one were to put this theory to work as always demand best-of-breed. For me, an MTB fits that bill, with its now upward-sloping 200-day SMA just one month ago. It met its measured move to 148 almost precisely from the recent bull flag breakout and is now retesting its 50-day SMA for the initial time following a breakout, often an ideal entry point. Also, the MACD signal line is approaching the round zero level, which was former resistance and bulls will look for that to turn into support. If strength persists a double bottom add-on pivot of 140.37 is set up.

13 Jan 2024

Technology Sector Review: 1/15/24

By |2024-01-13T16:34:52-05:00Saturday|

New Sheriff In Town: Microsoft made a statement this week becoming the largest company on earth, although here it still shows AAPL as the top dog. Either way, momentum has been on MSFT's side with a one-year advance of 63%, and over the last 3 months has gained 19%. Compare that to Apple which is up a respectable 39% over the last year but has lagged Mr. Softee up just 3% during the last 3 months. MSFT will carry a lot of weight as its strength now makes it the top holding in the XLK, (second largest in the QQQ by a fraction), and remember that the DOW is a PRICE-weighted index, and Microsoft is the second highest-priced name in the Dow besides UNH, so it will have a big impact. The stock trades just 1% off all-time highs, with AAPL 7% off its own, and on its daily chart notice the stock CLOSING at highs for the daily range 4 out of 5 times last week and with the break above a cup base pivot of 384.40 it also negated the bearish dark cloud cover from 11/29. Late last week recorded its first bullish MACD crossover since early October which witnessed the stock register a nice PRICE run soon thereafter.

13 Jan 2024

THE WEEK AHEAD: Starting 1/16/24

By |2024-01-13T16:21:24-05:00Saturday|

Size Matter? Small caps are often thought of as a leading indicator, and maybe they are, but for me, they are a good predictor of interest rates. Keep in mind the vast majority of smaller companies are unprofitable and rely on financing to stay afloat. The performance chart of the IWM compared to the major three US benchmarks shows a big divergence. Whether one believes the IWM is a good leading indicator or forecaster of interest rates this is not a good development. We will talk about the 10-year yield later in this note, but is the weakness in the IWM trying to convey that rates are bottoming? The WEEKLY chart shows the current 3-week losing streak with the completion of a bearish evening star pattern the week ending 1/5 that fell nearly 4%. On its MONTHLY chart, we highlighted several times that it did see a nice bounce near the 160 level, the area of a prior double-bottom breakout from November 2020. But notice how big monthly gains circled have led to very little follow-through in the past. The IWM is now 6% off its most recent annual peak, with the Dow, Nasdaq, and S&P 500 all at or 1% off their own. Is this shouting "risk off" in play? The benchmarks could use a healthy breather.

11 Jan 2024

Technology Sector Review: 1/12/24

By |2024-01-11T16:46:21-05:00Thursday|

Round Number Obstacles: As my readers know I am a big proponent of round number theory. Instruments whether individual stocks or indexes will often pause there, or bounce, especially if the area is one of former significance. The WEEKLY chart below of the Nasdaq shows it stalling at the very round 15000 number which it did just a couple of weeks back. Will the second time around prove to show more confidence? Time will tell, but one has to respect the successful retest of the WEEKLY cup with handle breakout, and bears will point out the spinning top from 2 weeks back CLOSING just 11 handles above 15000 creating a bit of indecision and leaving it up for both bulls and bears to capitalize. Here one has to give the edge to the bulls with the Nasdaq uptrend firmly in place. Talking about round number theory it is no coincidence that AAPL was repelled by the 200 figure with a long spinning top candle on and then a doji the very next session for good measure. Keep in mind there is nothing worse than a breakout (above the bull flag in early December) that fails very quickly. We know the best ones tend to work right away POST breakout so this is a red flag. But if this influential stock, worlds largest market cap, can get its act together from here that could provide some fuel for a potential extension to the tech run we witnessed in Q4.