This article was published on TheStreet.com this morning:
All That Rises Is Not Tech: Top Takeaways From Jim Cramer’s ‘Off the Charts’
Tom Bemis of TheStreet.com Jul 19, 2017 6:30 AM EDT
Technology stocks get a lot of the credit for the market’s surge this year, but they’re not the only ones pacing gains, Jim Cramer told viewers on his Mad Money program. To get a better sense of which other stocks are doing well, Cramer went Off the Charts with Bob Moreno, the publisher of RightViewTrading.com and a contributor to RealMoney.com.
Moreno started by looking at a chart of ExxonMobil (XOM) , a notable non-participant in this year’s rally.Exxon’s daily chart has been trading sideways for nearly six months in a pretty tight channel, not surprising considering that oil has been range bound as well. But Moreno’s also noticed that Exxon seems to have a six-week cycle, with the stock bottoming out, then testing its ceiling of resistance before pulling back to its lows again. He thinks Exxon now has a well-established bottom at around the $80 area, and it just made another cycle low at the beginning of this month, which could mean that it has some upside, at least for the next few weeks.
To get a sense of what’s going on in the materials space, Moreno looked at the daily chart of Potash (POT) a specialty chemical play that normally trades closely with the energy space. Potash traded sideways for a good part of the year. But it recently broke out above its long-term ceiling of resistance and Moreno now thinks it could have a lot more room to run.
Healthcare stocks have been among the best performing groups this year and AbbVie (ABBV) is a good proxy for the sector, according to Moreno. The stock’s pattern is to trade sideways for a while, then rally sharply followed by another period of sideways consolidation. Last week the stock re-tested the low end of its recent channel, before bouncing back hard. Moreno thinks it’s only a matter of time before we get another breakout to the upside, because the stochastic oscillator, a tool that tells technicians when a stock has gotten overbought or oversold, recently made a bullish crossover, where the black line goes above the red one. At the same time, the Chaikin Money Flow oscillator, which measures the level of buying and selling pressure in a stock, is still in positive territory, suggesting that big investors continue to accumulate shares.
In the consumer discretionary space Priceline.com (PCLN) offers a barometer for discretionary spending, because few spending decisions are more discretionary than travel and leisure. Priceline’s stock is up 45% over the past year. In the last two months, Moreno notes that it’s been trading in a rising triangle pattern below the $1,920 level. Last week it broke out above that ceiling of resistance. Meanwhile, Priceline’s Relative Strength Index, an important momentum indictor, is tracking higher, and its accumulation/distribution line, a tool that tells you whether big institutional investors are buying or selling, is now trending above its rising signal average. Put it all together and Moreno thinks the stock is poised to resume its long-term uptrend.
Among financial stocks, Moreno focused on one of the stronger names in the space: Blackstone (BX) , the asset manager. Shares have been on fire. At the end of 2016, the stock’s short-term 50-day moving average crossed above its long-term 200-day moving average, what technicians call a golden cross because it’s such a reliably positive sign. Moreno notes that Blackstone just broke out above its recent consolidation channel, and if history’s any guide that could mean it’s now ready for another leg up. Meanwhile, the Moving Average Convergence Divergence or MACD indicator is making a bullish crossover. In addition, the Chaikin Money flow oscillator is moving higher and it’s out of negative territory. Moreno says Blackstone’s got a strong trend with a lot of technical indicators suggesting that the stock can keep gaining.
Finally, within the industrials sector, Moreno looked at Honeywell (HON) , currently just shy of a new all-time high. Honeywell’s been rallying steadily for months. Moreno points out that the MACD is making a bullish crossover here, and the money flow index, which is a volume-weighted momentum indicator, has made a sharp move up, crossing above its center line, a sign that big institutions keep buying the stock. Moreno believes that Honeywell’s long-term trend will continue, as the rally in the stock keeps pace with its rising 50-day moving average.