Don't Ignore This Chart

Dycom Breaks Cup Resistance With Strong Volume

Our major indices have been consolidating for many weeks and that's enabled many individual stocks to consolidate in bullish continuation patterns.  Dycom Industries (DY) is one such stock as it formed a long-term cup from early-August to late-February before printing a handle throughout March.  The right side of the cup showed very heavy volume before volume tailed off as the handle formed.  This week DY has broken out on extremely heavy volume as you can see below:

The blue arrow shows that volume is about double of any week over the past six weeks and there's still one more day left this week.  A pullback to test the breakout level just below 100 would be the best entry price, while the target would be the measurement of this pattern.  That measurement would be roughly 125.

Happy trading!

Tom

Etrade Corrects into Fibonacci Cluster

It has been a rough year for small-caps because the Russell 2000 iShares is up just 1.34% year-to-date and severely trailing the S&P 500 SPDR, which is up around 5.5%. Chartists looking for clues of a small-cap revival may want to watch E-Trade Financial (ETFC) and the other discount brokers (SCHW and AMTD). I will focus on ETFC today because it is currently correcting within an uptrend. An end to this correction could signal a return to animal spirits and a small-cap revival. First and foremost, the long-term trend is up because the stock hit a 52-week high in January and the 50-day EMA is above the 200-day EMA. 

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Aflac (AFL) Quacks Out A New High - Members Dashboard Tip

Some commercials are more memorable than others. As soon as we are reminded of the word Aflac, we immediately think of the white duck in a bizarre situation screaming AFLAC ! Without question, the commercials work for brand recognition. However, today the Aflac stock broke out to a new 52-week high from a nice consolidation. 

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Industrials SPDR Becomes Oversold and Finds Support

The Industrials SPDR (XLI) is at an interesting juncture because the long-term trend is up and it is testing the January breakout. After hitting a 52-week high in February, the ETF fell back to the breakout zone in the 63.50 area and firmed with a long white candlestick four weeks ago. Broken resistance is turning into support as StochRSI becomes short-term oversold. Look for a breakout at 66 to end this correction and signal a resumption of the bigger uptrend. 

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Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Wal-Mart (WMT) Hints At New 52 Week Highs - Search Tip

Wal-Mart (WMT) started ringing all kinds of alarm bells this week. Let's look at the chart, and then in the educational segment, I'll show some of the technical signals that Wal-Mart is marking.

Wal-Mart's SCTR has been rising recently. The price is trying to break out to new 52-week highs. This makes Wal-Mart interesting. The relative strength trend line broke in late February. The daily MACD moved up above the zero line. So I would always like a chart pattern like this.

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Utilities Surge as 10-yr T-Yield Drops below 2.3%

The Utilities SPDR (XLU) surged as the S&P 500 fell below its 50-day SMA on Wednesday. Overall, notice that the 50-day EMA crossed the 200-day EMA in mid December and the ETF hit a 52-week high in late March. XLU is the strongest of the nine sectors since November 30th (+12.84%) and it is even up more than XLK (+11.61%). On the price chart, it looks like XLU is breaking out of a pennant formation. The March-April lows are used to set support in the 50-50.50 area. 

Chartists looking for a reason can point to the 10-yr T-Yield ($TNX), which dipped below 2.3% for the first time this year. The indicator window shows the Correlation Coefficient ($TNX, XLU) in negative territory since the early part of January. This means they move in opposite directions. Expect utilities to continue higher as long as the 10-yr yield moves lower. 

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Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
*****************************************

StockCharts Adds A Webinar Tab ! MTA Review

Arthur Hill, Julius De Kempenaer and Greg Schnell all attended the Market Technicians Association meeting in NYC last week. With hours of presentations going on in multiple rooms it was very clear that technicians offer lots of variety and unique methods of covering the market.

The RRG charts available on StockCharts.com were in multiple presentations and were also included in one of the biggest online technical presentations in years. There are so many outstanding analysts that attend and share their work, it is exciting to see the variety of diverse market views.

I attended as many presentations as possible. Katie Stockton is on CNBC regularly and she shared her slides of the US market. Katie was full on bullish!

Robin Carpenter of CarpenterAnalytix.com presented some very unique SKEW data that was enlightening. Watching Robin's presentation was a firehose in statistical analysis. He presented three concepts and worked very hard to simplify the concepts, but he could go 7 layers deep on any slice of the concept. Very interesting presentation. Here is one of the charts he provided. Without getting into his one hour presentation, look at how close signals below zero on his CSQ Skew Deviation coincided with market pullbacks and how close to the top the signals were. In this case, he was suggesting to be careful.

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General Electric Finds Support, but Remains Short of a Breakout

It has been a rough year for General Electric (GE) because the stock is down around 4% and underperforming the S&P 500 SPDR (SPY), which is up around 6% this year. Despite relative weakness, momentum is improving as MACD edges into positive territory and the stock is bouncing off support. Notice that broken resistance and the 61.8% retracement zone turned into support as the stock bounced in early February. GE tested this level again in late March and bounced over the last two weeks. This is encouraging price action, but the stock remains below its first resistance hurdle. Look for a break above the red resistance zone (30.25-30.50) to show a significant increase in buying pressure. Such a move would turn this chart bullish and argue for further strength to the low 30s.

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Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
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