ChartSmarter Thursday Game Plan 6/12/14

Markets fell Wednesday with the Nasdaq surrendering .1% and the S&P 500 .3%. The Dow’s triple digit loss garnered the most attention, but that drop was due to the price weighted nature of the benchmark. The higher priced names influence the average more than lower priced names and declines in names like BA IBM V were responsible for early half the Dow’s fall. Volume expanded in todays session. The stronger Nasdaq looks to be forming a handle on its current cup base. It is now 3 days old and must be 5 sessions long to be considered valid. Tight trade would be optimal the Thursday and Friday as that would set up a buy on the index above 4347. The S&P 500 continues to trade remarkably tight as the 3 days from last Friday through Tuesday closed less than 2 handles apart. Energy was the best performing sector as the XLE gained .4%, with the 800lb gorilla XOM sporting a 103.55 flat base trigger. Notice on its weekly chart just how tight the closes have been. The last 6 weekly CLOSES have all been within $1.50 of one another. Peer CVX and XOM have both found precise support recently at their 50 day SMAs. One name in the group that is looking much better is PBR. The Brazilian energy giant is up nearly 14% the last four sessions and took out a bullish falling wedge pattern last Friday. Sellers were not able to “drill” the stock below its 200 day SMA, pun intended, both in April and again recently.