Douglas Busch

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So far Douglas Busch has created 3613 blog entries.
15 Mar 2024

Consumer Sector Review: 3/18/24

By |2024-03-15T16:36:28-04:00Friday|

Amazon Vulnerable? Within the XLY there are two dominant forces in AMZN and TSLA. We know the latter has been lagging and AMZN is doing its best to keep the ETF afloat, but what if that pressure is weighing on the psyche of the stock? The daily chart below of the XLY shows it clinging on to its 50-day SMA, but the failure of the cup base breakout, lasting just 5 sessions, is notable. On a YTD basis, it is just one of only two major S&P sectors in the red down .4%, and TSLA has been one of the culprits (this is nothing new and notice here how the WEEKLY chart shows how soft it has been since hitting a wall at the very round 300 number last summer and it could be headed to par with all the big WEEKLY losses CLOSING near lows). The WEEKLY chart of AMZN shows back-to-back spinning top candles and the possibility of a bearish MACD crossover which occurred last September and witnessed a quick 20% haircut. Rounding out the top 4 components it should be no surprise there is bifurcation there, with HD bull flagging, and MCD clinging to its 200-day SMA.

14 Mar 2024

Technology Sector Review: 3/15/24

By |2024-03-14T16:45:31-04:00Thursday|

Microsoft The Bellwether?   As MSFT comfortably pulls away from taking over the world's largest market cap play from AAPL, one should look for clues from this lone $3T behemoth. It is now the largest holding in the XLK, but itself and Apple still account for more than 40% of the fund. AAPL is not looking like it wants to follow through higher out of the bullish morning star pattern we spoke about last week. Last Friday's session was certainly suspect as the candle intraday looked strong but CLOSED meagerly and recorded a bullish inverted hammer. Three of the four days this week have filled in the upside gap from 3/4 and backed off. As AAPL now trades 13% off its most recent 52-week highs, MSFT has stayed in close proximity to all-time highs. Since breaking above the very round 400 number on 1/24 it has CLOSED above it except for 1/31. Today could be important as it broke above a cup base pivot of 420.14 and finished just off intraday highs. Remember the best breakouts tend to work right away so any stalling action here or failure to put some distance between itself and the breakout trigger would be interpreted in a bearish fashion. If this can finish Friday on a sanguine note that would have bears sleeping uneasy over the weekend.

13 Mar 2024

Healthcare Sector Review: 3/14/24

By |2024-03-13T16:20:12-04:00Wednesday|

Biotech Stamina?   The biotech space via the XLI is now 6% off the most recent 52-week highs after a quick spurt above the very round par number. Often that is where selling pressure will abate after an instrument has hit an annual peak. The daily chart below shows the fund is still above the recent cup base breakout and the 50-day SMA is catching up in PRICE. Another look here is how the 21-day EMA may be support here as it was between mid-January and early February, and notice how the Bollinger Bands are starting to contract (see how PRICE witnessed a robust move after the tautened in early February. To balance out the healthy sentiment the WEEKLY chart here shows the rejection at the 50 WEEK SMA and the bearish dark cloud cover candle last week which both took place in the area of the 100 area, where things will often at the very least take a pause. One positive that can be taken away from the WEEKLY timeframe however is the bounce off this mid-90s area, which was resistance in both early and mid-2022. I am still constructive on the XBI as long as it maintains ground above 90.

12 Mar 2024

Energy Sector Review: 3/13/24

By |2024-03-12T18:59:01-04:00Tuesday|

Energy Building: The energy sector as measured by the XLE is continuing its nascent rally and over the last one-week period is the third best-performing major S&P sector out of 11 higher by 2.4%. Over the last month, it is the second best, and in 2024 thus far it has advanced by 6% making it the sixth best actor. The group is not for those with an easy stomach as for the last 10 years the group has been either the best, second best, worst, or second worst. Of course, no one knows if this space will keep moving higher, but the XLE has momentum and is looking for its 5th straight WEEKLY gain, a feat last achieved during the summer of 2023. The chart below of the XOP, a more equal-weighted fund shows the ETF just above a double-bottom pivot and we know the best breakouts tend to work right away so bulls want to see this continue its gradual and steady uptrend. The ratio chart comparing the two shows the big heavyweights are still dominating, in favor of the XLE. Optimism rides on the fact that M&A activity has come alive, albeit at weak premiums, but if Chinese markets start to bottom this could give a lift to the sector too. As always for technicians it is a show-me world and PRICE action going forward will give us most of the answers. 

11 Mar 2024

Technology Sector Review: 3/12/24

By |2024-03-12T09:38:34-04:00Monday|

Future Semi Standout?   The semiconductors have been a standout as we know and I've been vocal last week stating that I think software will outperform on a relative basis, but of course, on an absolute basis there will be selective winners in each group. Below is the chart of ADI, which one can see on the ratio chart, has been underperforming the group. Technically I am warming up to the name if it can climb above the very round 200 number and CLOSE above 201.92. That would negate the bearish evening star pattern completed on 12/18/23, the bearish harami candle on 1/24, and the bearish dark cloud cover candle from 3/8 (all of these are circled on the chart). The 200-day SMA has held three times, perhaps too many with each of those touching points retesting the former bull flag breakout from early February. The very round 200 number was also a roadblock in late July with the last week of that month recording a bearish engulfing candle there. Last week registered a long-legged doji candle, so there is a lot to overcome near the 200 level, so be patient and wait if this can CLOSE above 201.92. If so it could be off to the races.