Author Archives: Rob Moreno

Weekend Request – TWTR/ HOV

Juan asked about the Twitter (TWTR) and Hovnanian Enterprises (HOV) charts:

Twitter is still untouchable. It was down over 3% on Friday and there is nothing constructive in the way of price action taking place on the chart. The centerline line of the Raff regression channel is the “best-fit” straight line of price since the 2013 high, and that is the first hurdle for the stock, the second being the area of the resistance zone and the downtrend line that is following the 50 day moving average. The barely bullish crossover on the MacD is the one positive technical indication. This stock needs to find a footing and begin the basing/recovery process.

25 Weekend TWTR chart

Shares of Hovnanian have been attempting to form a base above the $4.40 level. A 3% move on Friday took the stock price above its 50 day moving average and into a resistance zone defined by two important lows last year and the recent channel top. The MacD, RSI, and Chaikin money flow indicators have been in bullish divergence during the consolidation, and average true range and Bollinger bandwidth readings are extremely low, suggesting potential volatility. A 13% short interest, more than Twitter, could help power a breakout move.

25 Weekend HOV chart

As readers know, this analysis is for informational and educational purposes and is not a recommendation to buy or sell a stock.

SPY Volume?

Volume in the SPY today was 39% below its 50 day moving average of volume. Overall volume was particularly low this month, only above the 50 day average on down days, and considering how benign the VIX has been, the lack of conviction is noteworthy.

23. SPY vol chart

GLD Ready To Move?

The chart of the SPDR Gold Trust Shares (GLD) shows price compressing in a narrowing triangular range over the last two months. The Bollinger bandwidth indicator at the bottom of the chart, which measures contraction and expansion in the band range, is overlaid with a 14 period average true range. They are both at extremely low readings, reflecting the price compression and suggesting a potentially volatile move ahead. Price momentum indictors are flat to slightly higher, so it is difficult to gauge which way it is going to break.

23. gld chart

Weekly Chart Change?

The charts of the weekly indices are key to interpreting the intermediate term trend of the market. As readers know, I have been focusing on them and the tentative signal they have been sending this year after the formation of a series of high wick candles. Resistance is being tested once again and, at this point in the session, a very strong set of candles is pushing the previous high ranges of those weak candles. If the major indices could close out at their current levels or higher, it would signal, in my opinion, a major change in the message of the charts. But, stay tuned for the close.

Santelli/Moreno 10 Year Fib Retracements

Rick Santelli on CNBC earlier looking at the same thing that I have been highlighting for several weeks now, the potential Fibonacci retracement levels on the 10 year treasury yield chart. He retraces from a base of 1.63 and I use the 1.43 level, the latter being the 2012 low, but together a target zone between 2.22 and 2.16 is defined by the 50% retracement levels. Rick considers the 50% retracement level the level to watch if there is a big move in bonds.
I think 2.40 is going to be substantial support going forward, because the small congestion pattern that was recently broken projects to that level, which, of course, is also my 38% retracement level, but we will see how yield regress.

23. 10 year chart RVT