Trend Check with Tushar Chande

Tushar Chande
About the author: , PhD, MBA, is the inventor behind an impressive collection of technical indicators, including the Aroon and Stochastic RSI. He has written several books, holds both a PhD in Engineering and an MBA in Finance, and has over two decades of experience trading the financial markets. Follow Tushar in this blog as he highlights his new "Trend Meter" indicator and shares his analysis of current market conditions.

Latest Posts

Trend Check with Tushar Chande

Top Trending Small-Cap Stocks and ETFs

by Tushar Chande

Even as the Small-cap index rises to new highs, mid-, large- and mega-cap indexes are barely clearing their April highs.  So, I have scanned the database and identified the top trending small-cap stocks and ETFs for your review.  In an earlier post, I managed to pinpoint the major turning point within two days of a key low, and the markets have since moved higher without make new lows.  I will update below a key chart from that post so you can judge for yourself.   Chart 1: The S&P 600 Small-Cap index (middle chart, lower row) rose to new all-time highs, but the Read More 

Trend Check with Tushar Chande

Are Bulls Too Pessimistic Even as Data Break Their Way?

by Tushar Chande

All the data reported this week broke in favor of the bulls: strong earnings from Apple, the Federal Reserve remains committed to 2-3 (not four) rate hikes this year, and job creation was steady without rising wage pressures. Overall earnings, guidance and dividend data were also excellent.  Lastly, the Mnuchin Mission to China produced soothing statements suggesting more talks but no immediate crisis.  Other than stormy clouds over the nation's capital, the bulls should be empowered to seize the initiative.   Chart 1: The all-important Apple stock, with its very large Read More 

Trend Check with Tushar Chande

Market's Reluctance to Rally Raises Risks (Plus: 28 Top Financials)

by Tushar Chande

Higher open, lower close: the market's inability to rally convincingly on the back of strong earnings raises down-side risks.  Caterpillar led the way, with a massive sell-off as it failed to please analysts on their conference call.  Other mega-caps followed suit after Caterpillar's manic Tuesday.  The 10-year US Treasury yield has hit a bit of resistance just above 3%.   Since rising rates are good for Financials, a table of the strongest 29 financial stocks is shown below.   Chart 1: Caterpillar set the pattern for many key reports Read More 

Trend Check with Tushar Chande

Market Hits Resistance (Also: Did you Suffer from Portfolio Diversification Malfunction?)

by Tushar Chande

The market rose into resistance and pulled back a bit, even as the short-term trend picture improved significantly.  The reported earnings were strong, but manged to disappoint some traders.  On a different note,  I explore the performance of bonds, gold and commodities in providing diversification during this year's decline (hint: the results may surprise you).   Chart 1: The broad-based NYSE Composite rose into resistance and pulled back a bit.  There are many layers of resistance overhead,  as I have been saying in my past several posts. Read More 

Trend Check with Tushar Chande

Jittery Bulls Loosen Grip of Bears (Plus: Where the Trends Are)

by Tushar Chande

This week jittery bulls pushed through a swirl of headlines to loosen the grip bears have on this market.  There have been no new lows since my last post on the double bottom, and the bulls managed to push through the down-trend line and some overhead resistance on short-term charts (see Chart 1).   Risk-appetite, measured by the HYG ETF, has re-emerged, with the HYG rallying nicely this week.  Lastly, market volatility, so essential to the bear case, continued to drift lower.  However, the $VIX index remains above its recent lows, fed by a flurry of headlines and Read More 

Trend Check with Tushar Chande

785 Reasons to Believe in a Double Bottom

by Tushar Chande

The 785 point reversal in the Dow Jones 30 today suggests that the market has built a durable double-bottom over the past week.  Naturally, more work needs to be done, to breakout above recent resistance and above the down-trend line.  But, with today's rebound overcoming massive headline risk, with resistance holding to the expansion in the $VIX index, with economic data being firm, and earnings promising to be up double-digits all year long, the market can perhaps start focusing on actual data, instead of reacting to headlines.   Chart 1: Today's rebound was an Read More 

Trend Check with Tushar Chande

Buy Low, Sell High: Three Entry Zones Into Enticing Double-Bottom

by Tushar Chande

The markets have served up an enticing double bottom on a silver platter.  How should you trade it?  Well, that depends always on your risk preferences.  I can identify at least three entry zones, each with different risk reward profiles.  Of course, you can be bold and buy and hold, but then here's your chance to buy low and sell high.   Chart 1: The broad market is clearly oversold (see StochRSI in the lower panel) and approaching the early February lows.   What are the Entry Zones? Read More 

Trend Check with Tushar Chande

The Facebook Face-plant: Which Technical Indicators Offered an Early Warning?

by Tushar Chande

Facebook dragged down the market as it cracked under head-line risk.  Here I will take a multi-faceted look at the FB charts to see how various technical analysis indicators set up going into the spill, which could inform your trading in the future.  Since different technical indicators measure different aspects of the price action, a composite review is useful to understand the dynamics and speed of response of the various indicators.   Chart 1: After trending higher for most of 2017, Facebook has been trading mostly sideways since late-November in a distribution pattern Read More 

Trend Check with Tushar Chande

Back to Basics: How to Automatically Change Look-Back Length Using Market Volatility To Create Dynamic Technical Indicators

by Tushar Chande

The double-digit declines in the market in early February over a nine day period are an example of volatile market action.  Here I will illustrate how you could automatically adapt your technical indicators to price action.   The idea behind this tutorial is to give you an intuitive feel for how it can be done.  (See references below to my previous work in this area.)   Chart 1: The 10-day Average True Range (ATR10) in the lower panel shows the rapid expansion in ATR10 from say 200 to 600 during the 9-day sell-off in February.  I want to use the expansion in Read More 

Trend Check with Tushar Chande

Risk of Double Bottom Recedes With Breakout

by Tushar Chande

The strong rallies this week resulting in a Nasdaq Composite new high, a Dow 30 breakout out of a symmetrical triangle, and the rapid improvement in market internals in the short-term have essentially eased concerns about a double-bottom that retraced all the way down to the February low.   Chart 1: The S&P 500 broke out of the symmetrical triangle to signal another leg up to the prior highs.  I believe this resolves the doubts about a potential double bottom in the market down to the February 09 lows near 2540. Observe how the CTM never fell below 20, our first solid Read More 

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