Chartsmarter Insights

Biodegradable Biotech Breakouts: Biotech investors and Met fans have something in common. We have been conditioned to accept defeat. But could sentiment be becoming so bad in the group, that even a small bit of good news can get the space rocking again? Wednesday did complete a bullish island reversal with the gap up, although the XBI CLOSED 2.5% off intraday highs on a candle which could be considered a bullish inverted hammer. Some green shoots are the strength on an awful tape this Monday, as the XBI was green for a good portion of the day. Sure we may be cherry picking but that could have been a tell. Since the devilish intraday low of 66.66 on 4/9 with that huge bullish engulfing candle rising more than 7% it has not declined in back-to-back sessions. To demonstrate how washed out sentiment is, the XBI is looking for its first 3-week win streak since last June and last week did record a rare doji candle (the only other one in last 2.5 years was one at the top the week ending 9/20/24. Top ten holding GILD REPORTS after the CLOSE Thursday, and will give us a good feel what to expect going forward. Will this strong-performing mega-cap start to put some capital to work via acquisitions that could finally start to get this group going in the second half?

Baby Steps:  Technicians for one thing judge a healthy market by how many breakouts are not only occurring, but more importantly how they are acting POST breakout. We know the best ones tend to work right away and follow through, and this behavior has been non-existent as of late. Could that be changing with Tuesday's break above a double bottom trigger just below the very round 1000 number? We will find out how it finishes the week over the next few sessions. Remember we looked at PLTR and it was able to CLOSE above its 98.27 double bottom pivot just one session but today completed a handle on that base and can be added to or initiated with a buy stop above a 99.09 trigger. CRWD has vacillated between the very round 300 and 400 numbers but has shied away from its attempted break above a double bottom trigger of 392.79. Will the third time be the charm for a legitimate breakout for NFLX? It is possible fledging breakouts will gain more confidence and take their cue from it but that remains to be seen. PRICE must confirm but Tuesday was a good start. Tuesday was a nice CLOSE above the pivot although it CLOSED off intraday highs. Lets circle back on this one at the end of this week.

Start Your Engines: Earnings season will start coming into hot and heavy after the banks kicked off the festivities recently, and perhaps there will be nothing more anticipated than TSLA tomorrow after the CLOSE. The CEO has been devoting almost all of his time away from the company and that may be reflected in the PRICE action following. Below is the daily chart and one can see the bear flag, and Monday has now filled in the gap from the session 4 times, and if a stock gives you multiple chances to get in at a specific location that will often play out soon as a bull trap. Of course, with earnings Tuesday afternoon, I would never endorse blindly putting on a position and the WEEKLY chart has a mixed look with two bullish hammers followed by a couple of bullish inverted hammers and then a bullish engulfing candle during the 5 weeks ending between 3/14-4/11. This all happened while retesting a bullish inverse head and shoulders formation. The MONTHLY failure to break above a 414.60 cup base pivot that started with the doji candle in November 2021 (bounced precisely off the very round par number in January 2023) last December and this January was foreshadowing the recent weakness. 

O Canada: In this note we go around the world looking at banking plays from Japan, India, and Colombia, and many of our domesic names, but with our neighbor to the North their is a clear outlier since the start of 2025. The performance chart here measuring the returns of the larger banks shows TD almost climbing above the top of the chart and it is the only one of the quartet in positive ground, and doing so by double digits and sporting an attractive dividend yield of almost 5%. On the longer term MONTHLY timeframe this name has a nice technical look below, riding its 50 MONTH SMA and for the last 3 years plus has been absorbing the big move between March 2020-February 2022 that rose 179%. This should feel a gravitational pull toward the cup base pivot of 70.71 in the near term and a break above there would carry a measured move to the very round 90 number. Peering at the DAILY chart there area few things to admire. First it is currently shrugging off the doji candle from 3/25, it completed a bullish island reversal with the gap up on (after the gap down 4/4) Monday, and is outshining the XLF since last December. 

Nvidia Makes a Stand: If the market ever needed a frontman to stand up NVDA would be the one. Wednesday it put the market on notice that it is not fooling around. The stock recorded a long-legged doji candle which is adept at signaling trend changes from the prevailing direction. We all know the phrase, that in new bull markets, fresh leaders rise to the occasion instead of older mature names, but Nvidia will be in the picture going forward. I am not saying a burgeoning bull is awakening by any stretch, but for the bulls to come out of a prolonged hibernation confidently they need to commence with baby steps. I still think this is a market that will take some time to recover as we all have been conditioned to expect V-shaped recoveries, but this is likely to be a trader's market for some time. Tactical trading, looking for 4-5% moves, as the WEEKLY chart suggests this break below the bearish rounded top will be tough to penetrate to the upside. Thursday will record its seventh straight WEEKLY CLOSE below the 50 WEEK SMA, but the bullish engulfing candle last week felt capitulative. I think one can play this on the long side as long as it remains above the very round par number. If that level is undercut all bets are off. In fact it is a low percentage possibility but on the MONTHLY chart there is no reason it can not travel toward its 50 MONTH SMA sometime in the second half if markets continue a sideways to down path for the rest of 2025 (would probably be in the mid-70s as that upward sloping line would catch up in PRICE). It tends to come into contact with the secular line every few years.