The old adage goes “when the tide goes out one can see whose left with their pants down”. We can put that wisdom to work during yesterdays bullish reversal session. Of course no one knows if the bear is done, but it pays to monitor which stocks did not participate in Mondays revival. That can often be a tell that further weakness in the near future is very possible. Lets take a look at four examples below that fit the bill lagging yesterday.
In our Monday 11/9 Game Plan we looked at FFIV. Tech had been assuming leadership but FFIV did not get the party invite. It failed to take out a 136.31 cup base trigger in late July and is now lower 5 of the last 7 weeks. 3 of the 5 down weeks were lower by 7% or more. FFIV is now LOWER by more than 10% from the recommended trigger and is on a current 6 session losing streak. Below is precisely how it was examined on 11/9.
FFIV is an IT laggard lower by 16% YTD and 11% over last one year period. Earnings have been mixed with gains of 7.7 and 1.6% on 7/23 and 4/23 and losses of 9.3 and 10% on 10/29 and 1/22. The stock has not participated at all with the Nasdaq’s 6 week winning streak as it has gave up ground 8 of the last 10 weeks. It has formed a double top near the 136 level with weeks ending 12/26/14 and 7/31/15. On the other hand it has formed a double bottom roughly at the 108 level the last couple weeks and with the week ending 1/23/15. The last 7 sessions have formed a bear flag pattern and enter with a sell stop below 107.75. There has been recent chatter about a possible takeover, but these rumors rarely come to fruition.