Don't Ignore This Chart

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About this blog: The blog contains daily articles with intriguing or unusual charts selected by one of our Senior Technical Analysts, along with a short explanation of what exactly caught their attention and why they believe the chart is worth noting.

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Don't Ignore This Chart

Financials Made It Into The Leading Quadrant, Now What?

by Julius de Kempenaer

At yesterday's close, the Financials sector (XLF) crossed over into the leading quadrant on the daily Relative Rotation Graph. The tail of the sector started to curl upward inside the lagging quadrant roughly two weeks ago, before then proceeding to travel higher on both the Jdk RS-Ratio and Jdk RS-Momentum scales. The sector traveled from lagging into improving and has now entered the leading quadrant. The increase on the RS-Momentum axes has stalled over the last three days and is now flat. This indicates that relative momentum is now stable/flat, pushing XLF Read More 

Don't Ignore This Chart

Are We Looking At A Wedge In The Making?

by Julius de Kempenaer

When acting in an environment of uncertainty (of which financial markets are a prime example) it is a good habit to double-check any findings. Think of it as an extra pair of eyes to confirm or deny what you (think you) are seeing. In this process, please keep an open mind and try not to get (too) married to your own ideas/views. Markets have no mercy. Fellow colleague and commentator Dave Keller has a subtle but great reference in the sign-off below all his blogs - "RR#6." Since you may be wondering what that means, here's a link to the explanation Read More 

Don't Ignore This Chart

JB Hunt Stalls In The Intersection $JBHT

by Greg Schnell

JB Hunt (JBHT) announced results that were not as positive as expectations and the stock dropped in response. The timing of the news happened to stall the stock right at the 40-week moving average. While the global economy has been rallying on since the late December lows, a lot of the attention has been focused on the continued growth in freight. JB Hunt is trucking into its 4th quarter of underperforming the $SPX, shown on the area chart with a high showing up last June. These lower highs in a major freight company are not bullish. The PPO continues to make lower highs Read More 

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Three Breaks And You're Out For NFLX?

by Julius de Kempenaer

Since the beginning of the month, NFLX is lagging the S&P 500 index by more than 5%. This is following the relative weakness that entered this stock after a strong start of 2019, where NFLX initially ran from $230 to $370 but started to move sideways, facing heavy overhead resistance around $380. From January to March, the subsequent highs were still higher than their predecessors, albeit only marginally. Failing To Push Through Resistance NFLX's failure to push higher was already an Read More 

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Is Costco (COST) Checking Out?

by Greg Schnell

Costco (COST) is one of the great retailers in the modern age. Recently, I went to Best Buy to buy some home electronics, but ultimately found out Costco had a better bundle at a better price. How a warehouse retailer offers better bundles than the specialists is a great question, but it's also the reason for Costco's success; they have a supplier design a bundled offering and it ends up being way better than the specialty retailer. That is true in everything from silverware to steaks, fruit to flowers or bread to butter. Somehow, it just works. Then you look at Read More 

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Is NVDA The Strongest Stock In The Strongest Sector?

by Julius de Kempenaer

Looking over some Relative Rotation Graphs this morning showed me that the Information Technology sector is currently the strongest sector in the S&P 500 universe. XLK is positioned well inside the leading quadrant and is being powered further into that space by a long tail. It is difficult to conclude anything other than that this is a strong rotation. Bringing up the weekly data, the RRG for technology stocks against XLK shows an image with a high concentration of stocks on the right-hand side of the graph (= positive territory) with tails pointing Read More 

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Japan ETF Stalls At The Wall $EWJ $NIKK

by Greg Schnell

Japan is a market that I like to keep an eye on, as it's a big participant in the global economy. This week, the Japan ETF is in focus as it tries to get through the 200-day moving average, as well as make a topside breakout through a key resistance level. During major downturns like 2015, 2011, 2008 and 2000, the 200-DMA is a good moving average to keep tabs on after it goes below. With the bond market starting to fire off some significant clues, it also suggests a need for increased caution if these levels cannot be broken. Today, Japan Read More 

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What Part of Advanced Auto Parts' Chart Do You Like?

by Greg Schnell

Advanced Auto Parts (AAP) has been struggling around the 170 level for years and we are back to that level once again. The SCTR has been strong, having recently pulled back as price consolidated through the first quarter. The SCTR is a method of comparing the strength of price moves across a group of stocks. I like to find stocks moving into the top quartile (i.e. above 75).  The full stochastic is moving back above 50, which is also good on a weekly chart. The PPO is a momentum indicator. There are four real phases of momentum: rising below zero, rising above Read More 

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Financials Are Not Looking Very Strong But In That Sector Regional Banks Should Really Be Watched

by Julius de Kempenaer

On the Relative Rotation Graph for US sectors, the Financials sector (XLF) is not in the best shape at the moment. It is positioned inside the lagging quadrant and heading lower on both axes. So, not much good there. At the moment I am in New York City to attend the CMTA symposium together with Arthur Hill, David Keller and Greg Schnell (and 300 other technical analysts). Obviously, we are discussing among ourselves as well.  My chat with Greg last night inspired this DITC chart. We discussed the weak position of the financials sector in the current market Read More 

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Is there a Biotech Breakout in the Making?

by Arthur Hill

The Biotech SPDR (XBI) is trading at a make-or-break point as it consolidates near the 40-week SMA. Traders should watch for the resolution of this consolidation because it will dictate the next directional move. The chart below shows XBI surging from the mid 60s to the lower 90s and then stalling with a small triangle. Technically, a small triangle is like a pennant, which is a bullish continuation pattern. A pennant breakout would signal a resumption of the prior advance and target a move to new highs. At this point, I have a bullish bias on XBI and expect a Read More 

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