If IBM closes near its current level, the price action on the daily chart will form a rare tri-star candle reversal pattern. On Monday, I noted the stock was breaking out of what looked like a bullish flag pattern, and measured a little less optimistically it reached the target price on an intraday basis. Again, a third doji candle is required to form the tri-star and here is a detailed explanation of the three candle formation.
I mentioned on Tuesday that the Global X Social Media Index Fund (SOCL) and the Biotech iShares (IBB) did not like the mention they received in the Chair Yellen testimony that day, but that both funds were approaching areas of minor support. A snap back rally did not seem likely and despite today’s strong moves off their 50 day moving averages, I still think a period of consolidation around current levels is required and would be healthy for the longer term future of the sectors.
This article suggests it was not a shoulder held missile that took down Malaysia Airlines Flight MH-17, but a more sophisticated weapon.
Starbucks (SBUX) was up over 13% from its May low to its July high. The rally formed a clear uptrend line on the daily chart and today that support was broken decisively with the stock price closing near its low. First downside target is the gap in the $76.00 area, just above the merge of the 50 and 200 day moving averages.
I highlighted the chart of American Express (AXP) at the beginning of the week. The high wick rejections at the top of the channel were warnings signs and now the stock is breaking below channel support. It has been a volatile day, so waiting for a daily close in lower candle range for confirmation.
The entire daily range of the Russell 2000 Index is centered in the zone of support delineated by the 50 and 200 day moving averages, which I highlighted yesterday.