Don't Ignore This Chart

Cybersecurity ETF (CIBR) Breaks Out To New Highs

The cybersecurity ETF (CIBR) broke out to new highs late last week. The chart shows a couple of downtrends also breaking. In this vertical market where everything is up, a stock that consolidates sideways for any length of time looks pretty weak. The SCTR has a downtrend line that looks to be breaking. An SCTR above 50 would mark new 4-month highs. 

The relative strength downtrend also broke so there might be more to this breakout. The move to new highs on the price chart after a consolidation sideways since March is very bullish. 

Continue reading "Cybersecurity ETF (CIBR) Breaks Out To New Highs" »

KLA-Tencor Traces out Two Continuation Patterns

KLA-Tencor (KLAC), a semiconductor equipment and materials designer and manufacturer, is in a long-term uptrend with large and small bullish continuation patterns working. The chart shows 52-week highs in May and October so the long-term trend is clearly up. The green outline highlights a cup-with-handle forming from June to November. On the right side of this pattern, we can see a sharp advance from August to October and then a pullback in November (blue lines). This pullback looks like a falling flag, which is also a bullish continuation pattern. A break above the mid November high would end the flag and signal a continuation of the August-October advance. A break above the prior highs would confirm the cup-with-handle and be even more bullish. Also notice that the indicator window shows MACD turning up near the zero line. 

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--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Timken Surges off Rising 200-day SMA

Timken (TKR), a mid-cap industrial, looks like it is resuming its bigger uptrend with a surge off the 200-day SMA. The chart below shows the stock hitting 52-week highs in April and October. The October high formed after a channel breakout and 25% advance. Timken then corrected with a rather sharp decline and briefly broke the 200-day SMA last week. This break, however, did not last long as the stock surged back above 47 the last five days. Also notice that MACD turned up and moved above its signal line. The long-term trend is considered up because of the 52-week highs and the recent MACD crossover suggests that the short-term downswing reversed. Thus, it looks like the long-term trend is resuming.  

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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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MGM Tries To Breakout Again

The gambling stocks have performed well over the last few years. MGM has traded sideways while WYNN has continued to climb. The consolidation looks constructive as MGM tries to breakout again. The RSI in the top panel continues to bounce off the 40 level which is a bull-market trait.

Continue reading "MGM Tries To Breakout Again" »

TJX Companies Reverses with Big Spinning Top

Retail stocks surged last week and discounter TJX Companies ($TJX) bounced off support with high volume. Technically, the big trend is still down because the 50-day EMA is below the 200-day EMA and TJX is below the 200-day EMA. These EMAs are not shown on the chart to keep it clean.

Despite the overall downtrend, TJX looks promising from a bullish standpoint because it reversed at support on big volume. Notice how the stock formed a massive spinning top after last week's gap down. The spinning top shows indecision because the open and close are in the middle of a large high-low range. Basically, prices gapped down with an open at 67.60, fell further with a dip to 66.44, bounced with a surged to 69.59 and ended up near the open with a close at 67.94. There was a whole lot of pushing and shoving during the day, but not much change from open to close.

Indecision can lead to a directional change and TJX reversed course with a bounce the next three days. This bounce off support is impressive because it occurred with high upside volume on two of the last three days. Also note that competitor Ross Stores (ROST) hit a new high and discounter Big Lots (BIG) broke out. 

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

Plan your Trade and Trade your Plan
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Nike, Skechers Lead Rally In Footwear Stocks

Skechers (SKX) rallied approximately 40% after its most recent quarterly earnings report and Nike (NKE) has gone from 2017 lows to nearly a 2017 high in the past five weeks, highlighting a significant rally in the Dow Jones U.S. Footwear Index ($DJUSFT).  The DJUSFT rallied 3.21% on Friday alone and is on the verge of a very significant breakout:

The DJUSFT is heavily weighted toward NKE and you can see that in the chart above.  NKE's major price resistance level is 60 and a breakout with confirming volume would be extremely bullish for the entire industry group.

Happy trading!

Tom

Western Digital Breaks Out of Continuation Pattern

Western Digital (WDC) appears to be emerging from a consolidation pattern and this increases the chances of new highs in the coming weeks. The chart shows WDC hitting a new high in July and then falling with a rather sharp decline into early August. The stock immediately rebounded after this decline, but then traded sideways as a triangle formed. This triangle is basically a consolidation within an uptrend and a breakout means the bigger uptrend is continuing. Note that the 50-day EMA has been above the 200-day EMA for over a year now. WDC struggled to break the triangle trend line in late October, but buying pressure increased over the last six days as the stock edged above the August high. A resistance breakout is in the making and this means WDC is poised to challenge its July high. 

Follow me on Twitter @arthurhill  - Keep up with my 140 character commentaries.

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

Plan your Trade and Trade your Plan
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