Chartsmarter Insights

23 May 2024

Healthcare Sector Review: 5/24/24

By |2024-05-23T18:45:01-04:00Thursday|

Four-Figure Fence: Long-time readers of mine know my affinity with round number theory. And some figures are more important than others, with names that trade through 90 very often going on to reach par and beyond. A rare number that is not often spoken about is 1000. Thursday NVDA did so catapulting above the figure and could there be room for another to join the exclusive clique? Below is the chart of REGN which is the third largest holding in the more mature IBB and this one has experience near 1000, which may give it a bit more confidence to clear it the second time around. On the WEEKLY chart, one can see it hit the level and recorded a spinning top candle the week ending 3/1, which often indicates exhaustion and it did proceed to fall more than 10%. The MONTHLY chart shows some robustness as it could record a bullish engulfing candle in May, after a very small range in March which registered another spinning top. Notice how the 28-session ADX signal came in very handle calling the near-term bottom in early May. I feel this name has room to 1100 by the end of Q2.

22 May 2024

Technology Sector Review: 5/23/24

By |2024-05-22T20:38:15-04:00Wednesday|

Was The REPORT Good Enough Tonight? For all the talk of defensive groups leading the way in 2024, technology as of late does not want to hear about it. Over the last one month period the space is the best performing major S&P sector out of 11. Renewable energy equipment is playing a big factor, and TAN may be "heating up", pun intended, as it breaks ABOVE a WEEKLY bear flag pivot at the round 40 number. But semiconductors have been a huge contributor to the outperformance and the SMH chart shows a very nice run since a bullish harami candle was recorded off the very round 200 number on 4/22. Some would call Wednesday's session somewhat soft as a bearish hanging man candle, which also traded into the big bearish engulfing candle from 3/8. It is now well above the double- bottom breakout trigger of 227.67 taken out on 5/15 and it would not be surprising at all to see another push toward the above overbought 75-80 RSI level which was normal between last December and March. From a seasonality perspective, the SMH in May is living up to its strong billing up 9% this month so far. The elephant in the room is the WEEKLY chart below of NVDA. A CLOSE Friday above 1000 would go a long way in keeping this market rally going into the second half of 2024. 

21 May 2024

Consumer Staples Review: 5/22/24

By |2024-05-21T16:21:39-04:00Tuesday|

Staples Courage: The staples have been a mediocre space when compared to the other 10 major S&P sectors, but they warrant attention. We last wrote about them a month ago as the XLP was attempting to reclaim its rising 50-day SMA and it did go on to record the double bottom breakout, which then went on to form a handle as well on the base. Top holdings that are acting well include WMT, which just recorded its second straight well-received earnings reaction up 7% and clearing a 61.54 cup base pivot in the process (the WEEKLY chart shows as clean a bull flag breakout as one can see). COST is holding above a cup base pivot of 785.92 as it deals with round number theory at the 800 figure. PM shows no one is immune from round number theory as it looks to shake free from the par figure, although give it credit for negating an ugly bearish engulfing candle from 4/25 and is now dealing with a bearish evening star completed last Friday. ELF has hit a stumble, a name that registered a 15 of 16-month win streak between May 2022-August 2023. It REPORTS Wednesday after the close, overshadowed by NVDA, but perhaps a disappointment may offer a rare opportunity into its rising 50 WEEK SMA near 141. 

20 May 2024

Consumer Sector Review: 5/21/24

By |2024-05-20T16:24:43-04:00Monday|

Size Matters:   As the 2 largest names that dominate the XLY in AMZN and TSLA kind of wobble the XRT is doing the same thing. Looking at the XLY one can see how this has been a bit fragile since the 52-week highs with the bearish island reversal with the gap up on 3/21 and the gap down on 3/22. It has met consistent resistance at the downward-sloping 50-day SMA for more than a month now and the bull flag was never taken out (notice its weakness against the S&P 500 for at least the last 6 months as well). The chart below of the XRT, a more broader-based ETF trades a bit tighter than the XLY but does not exude a bunch of confidence. It was never able to break above the range between the round 70-80 numbers and now is right back to the middle of that area. On the WEEKLY chart, notice the bearish shooting star candle last week, in the largest volume since the week ending 1/29/21. The wild ride that the top-holding GME has undergone contributed heavily to the making of that WEEKLY dubious candle. Last Friday completed the bearish island reversal following the gap up on 5/13 at the very round 20 number. 

17 May 2024

Far East Review: 5/20/24

By |2024-05-17T21:27:56-04:00Friday|

Red Dragon Awakening: It is not like the Chinese markets needed another jolt higher this week, which seemed to come after some 13F filings were released which displayed Tepper seems to be all in on the country (there was underlying strength here in previous weeks). Of course, the data is stale somewhat but his portfolio was made up of nearly one-fourth Chinese stocks. We had highlighted this fund recently in our China/Japan Note back in late April and it has been off to the races ever since. My feeling is that the ETF will feel a magnetic pull toward 35, best seen here on the MONTHLY chart, an area of former influence being both support and resistance dating back a decade. The current set up if it gets there would be an ascending triangle and a break above 35 would see a measured move to 53 (notice the top being put in with the gravestone doji candle in February 2021). KWEB is now up 15% this month so far and if that holds would be its first 4-month win streak since it did so starting in April 2020 which started a melt-up advancing 10 of the next 11 months. Another 4-month win streak in the last 10 years commenced in January 2017 and led to a 12 of 13-month win streak (one other was muted the first 4 months of 2019). Look for some big follow-through if this vibrant May gain so far holds up.