Shares in the social media giant Facebook (FB) increased 4.6% at the close of trading on Tuesday. This increase was on the back of the announcement a PayPal head will join the company to head it’s messaging products division.
The share price below shows the recent price action with a strong breakout from recent congestion. The breakout occurred on relative strong volume which adds to the bulls conviction to rise the share price.
Traders can look at entering a long position with a target price close to the March high of $72.00. Stops can be placed under the most recent congestion low of $62.00.
It’s been several weeks since my last blog post as I decided to take 2 weeks off from trading the markets. In that time I have been able to take a step back and analyse the broader market sentiment without the pressure of finding new trading opportunities. This article will focus solely on the three main US financial indexes of the Dow Jones, S&P500 and the Nasdaq 100.
Dow Jones Index
In early April the Dow Jones tested the December 31st resistance level of 16,600 but failed to clear this level and subsequently fell and held at the support level of 16,050. The rally has headed back up towards the 16,600 level but appears to be losing momentum. The current chart looks to be forming the right shoulder of a top reversal head and shoulders pattern. If the index continues to fall and then breakdown below the 16,050 support then this would signal a valid head and shoulders reversal formation. At that point further declines towards the next support level of 15,350 would be possible.
S&P 500 Index
The broader S&P500 index has been slightly less volatile than the Dow Jones index above. It is currently range trading in a longer term up trend. The price appears to be having trouble clearing the 1,900 resistance level and it would not surprise me to see the price head back towards the up-trend line and find support there before it pushes higher.
Nasdaq 100 Index
The Nasdaq is currently trading in a downward trend channel and making a series of lower highs and lower lows. The bigger picture shows the possible formation of a head an shoulders reversal pattern as I have illustrated with the three black circles. I see the index pushing back towards the support level of 3,420 in the coming weeks and if this level is broken then it would validate the reversal pattern. At this stage I will be staying on the sidelines for any long position trades for shares in the top 100 Nasdaq Index.
The US markets were closed yesterday for the President’s Day national public holiday. The Dow Jones Index has made strong gains over the past week and is currently trading at the 16,200 resistance level. After such a strong bullish run there may be a retracement back towards support before it makes it’s next thrust higher.
Allied Nevada Gold (ANV)
Allied Nevada Gold has been consolidating over the past 6 months with a horizontal resistance level at $5.34 which was cleared on Friday with a breakout candle.
In this situation I would normally wait for the market to open the day after the breakout before I placed a market order. If the price can open above the resistance level of $5.34 and hold for the first hour of the trading session then I would look to enter. If this occurs then my preference would be to enter within the range of the real body of Friday’s breakout candle. An appropriate stop loss would be a few cents under the $5.00 round number value.
Seabridge Gold (SA)
Seabridge Gold has a similar chart setup to Allied Nevada above. It has consolidated and formed a base over the past three months with the formation of an ascending triangle. Friday saw a bullish candle breakout from the resistance level of $9.00. Traders should wait till today’s open to ensure it opens above the $9.00 level before going long. I will place my stops below the red line as indicated ($8.44).
The website pages section has been updated and contains my NYSE chart of the day for Boston Scientificwhich has a more thorough trading analysis.
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U.S. stocks rebounded on Thursday as investors welcomed data showing a robust pace of growth in the economy in the final quarter of last year, while upbeat earnings from Facebook gave confidence to the tech sector. The Dow Jones Industrial Average increased 109.82 points, or 0.7%, higher at 15,848.61 rejecting the support level I have identified on the daily chart. This is an important technical level with any breach below 15,720 signalling weakness and may precipitate further declines towards 14,765.
Duke Realty Corp (DRE)
Duke Realty Corp reported a better than expected fourth quarter revenue increase of 7.9% on the corresponding period last year. The share price has been consolidating sideways over the past several months. I have highlighted the cup and handle pattern formation on the price chart below. This pattern occurred at a support level and a breakout of the resistance level yesterday on a good earnings report gives the appropriate signal to trade this share on the long side.
I would look to enter somewhere just above the resistance level with a stop loss just under yesterday’s candle low.
Zebra Technologies (ZBRA)
ZBRA brokeout from a trading range overnight on increased volume. This is a bullish trading signal and is likely to signal further price increases.
The Dow Jones Index continues to show weakness. Overnight declines saw the index close at 15,738 points which is just above the support level identified on the chart below. If the index breaks below the 15,720 support level then further declines are possible so traders need to be watching this critical price level to determine the future market direction.
Given the recent short term bearish sentiment it has been harder to find good long trading opportunities on the US stockmarket. However I did manage to find three stocks with sound technical formations.
Ariad Pharmaceuticals (ARIA)
There was a breakout from $7.80 resistance on strong volume four days ago with a subsequent orderly retracement. I will be watch for a bullish candle close to provide my trigger to enter long. Stops under $7.00.
National Fuel Gas (NFG)
The stock managed to breakout from resistance six days ago. Yesterday saw a bullish candle on strong volume confirming the breakout.
Rovi Corp (ROVI)
The price action is forming a bullish flag/pennant. Traders will need to wait for a breakout from the upper trendline of the flag to trigger this setup.
US stocks rebounded on Tuesday after the recent heavy sell off of the previous week. The S&P500 Index closed up 10.94 points, or 0.6%, at 1,792.50, snapping a three-day decline. The Dow Jones Industrial Average gained 90.68 points, or 0.6%, to 15,928.56, breaking a five-day losing streak. The charts below provide further clarity and my technical analysis.
Dow Jones Index
The sell off from the all time highs achieved on December 31 has been swift with recent accelerated downward momentum over the past week. The index price is moving towards the significant price level of 15,700 which has acted as both resistance and support in the past 12 months as highlighted on the chart by the yellow circles. The Index could drop further from current levels of 15,900 and pause at this support level of 15,700 before making its next move. A breakdown below 15,700 could trigger further declines with the next lower support level not coming in until 14,765.
S&P 500 Index
The broader S&P500 index has also been sold off heavily over the past few weeks and has found support at the December support level of 1,775. The index could use this support and use it to propel prices higher where it is expected to hit resistance at 1,810. A breakdown below 1,775 could see prices decline to the next lower support level of 1,745.
Because of the recent short term decline in both the Dow Jones Index and the S&P 500 index I will be remaining on the sidelines and not taking on any long positions until the market can find direction.
This stock trades on the New York Stock exchange and provides securities brokerage services and technology based financial services to retail investors, traders and independent registered investment advisors. It provides services through the Internet, a national branch network. The company offers common and preferred stock, exchange-traded funds, options, mutual funds, fixed income, margin lending and cash management services.
It is due to announce its earnings today July 23rd.
The chart of its share price below sows it has been in a strong up trend. It has consolidated sideways and formed a pennant flag. Depending on the results of its earnings this could breakout out of the pennant today if earnings are on target or better than expected.
I would not enter this trade until after its earnings are announced. A potential trade setup is to Buy at $26.26 with stops placed below the lows of the pennant at $25.36.
I will keep bloggers posted on how this potential trade plays out.