For most of the year it looked like PVH (PVH) was in the process of forming a rounded top on its weekly chart. The higher low in October, however, caused the complexion of the chart to change and turned a decidedly bearish roll-over into a more bullish wedge-like formation. That wedge resistance was recently broken and the stock has been seeing follow-through buying. The MacD is moving above a downtrend line of its own and Chaikin Money Flow is well above its centerline, reflecting accumulation.
On the daily chart, the 50 day average can be seen crossing above the 200 day average and resistance is more clearly defined at the $128.00 level. A close above horizontal resistance looks like a long entry point, with a position size that accommodates a trailing stop under the rising trend line drawn off the October/November/December lows.
The bearish star cluster on the Starbucks (SBUX) chart highlighted last week preceded price action this week that has taken the stock down below the recent breakout level of its 2013 all-time high. The MacD has made a bearish crossover and the Money Flow Index, a volume-weighted relative strength measure, has crossed into negative territory and reflects distribution. Weakness in the context of the strength in the broader market over the last two days is a further bearish indication.
There is interesting technical action on the Russell 2000 iShares (IWM) fund daily chart. On Monday, the bottom end of the small channel it has been trading in for the last month was penetrated by a large dark candle, the following day a narrow opening and closing range, high wick candle formed reflecting further inability to hold above channel support, and finally yesterday’s very strong bullish move created a large white candle, that closed back in the center of the channel. This three day price action resembles a morningstar reversal pattern and reflects a transition from bearishness-to-bullishness. They are of particular importance when they form near significant lows or technical levels, like the intersection of the 50 and 200 day moving averages. The rebound in the fund price has continued into the end of the week and at this point in the session, shares are retesting channel resistance. The next level of resistance above this small interior channel is the upper end of the large channel, that the IWM has been trading in for most of the year.
The 10 Year Note Yield is bouncing off the support line of a descending channel. It’s a short term move in the context of a longer term trend.
Last week, I suggested that the spot price of crude oil was nearing a potential bottom, based on a target measured off a multi-year triangle formation. Today the price of the commodity bounced off that specific level, and it looks like a good area to begin a basing process.
Shares of Alibaba Group Holding (BABA) pulled back from their November high to a 50% retracement of their historic range. The downtrend line created by the one month decline was broken in today’s session. A close in upper candle range above the trend line is a long entry point, with a trailing percentage stop.
Amazon (AMZN) shares are down 4% this week and headed towards their October lows. The price action this year has formed a declining triangle, with pattern support at the 50% retracement level of the 2012 /2014 range. This reinforced level of support could see at a minimum a bounce, but a breakdown projects a significantly lower price target.
The Global X Social Media Index Fund (SOCL) has broken through the support line of the large symmetrical triangle pattern it has been trading in this year, and closed on the 50% retracement level of its historic range.
Wild wicks today on the index charts. They gapped down at the open, rose sharply higher, then closed back near their opening levels, and below their 50 day moving averages. There is little in the way of technical support on the DJIA, S&P 500, and NASDAQ charts, above those 200 day moving averages. The channel breakdown on the Russell 2000 chart projects a target in the 1110 area.
Google (GOOGL)shares are penetrating their 2014 lows, and the support level of the large channel they have been trading in this year.