Monthly Archives: April 2018

Apple Shares Headed For Another Deep Decline?

A series of narrow opening and closing range candles formed in January on the Apple chart. These candles are usually accompanied by long upper or lower shadows or both, and they reflect indecision on the part of market participants. A nearly 13% decline followed the bearish candle cluster.

A similar cluster of doji-like candles has formed over the last five sessions on the daily chart, just above the flat 50 day moving average.

The moving average convergence/divergence oscillator has made a bullish crossover but is basically flat. Overall volume has been well below the 50 day moving average of volume this month, and Chaikin money flow is deep in negative territory.

If the stock acts heads lower, as it has in the past after forming a narrow range cluster, the first level of support is the 50 day average. The second level of support is the rising 200 day moving average, which is on track to intersect with the March/April lows in the $164.75 area.

Beneath the 200 day average are the February lows.

Here’s A Master’s Golf Tournament Trade With “Major” Upside Potential

This is a special week for golf lovers. The Masters, the first of the four major golf tournaments of the year, begins tomorrow at the Augusta National Golf Club.

There is a good chance this year’s winner of the coveted “green jacket”, may use a product by Acushnet Holdings (GOLF). The company manufactures and distributes Titleist golf balls and golf clubs, FootJoy golf shoes and apparel, and Scotty Cameron brand putters.

Acushnet shares are up 60% over the last seven months. They came off their highs slightly in March and the pullback helped form a bullish flag pattern on the daily chart. On Wednesday the stock price moved above flag resistance and closed near the highs of the session.

The flag pattern projects an upside price target which is measured by taking the height of the flagpole and adding it to the breakout point. It suggests a move to the $29 area, a nearly 15% gain in the share price.

The relative strength index has been above its center line since February and Chaikin money flow is solidly in positive territory. A bullish combination of positive price and money flow momentum.

An additional component of trade is the 35% short interest in the stock. The potential for additional upside could initiate a “covering” rally as those shorts abandon their positions and buy the stock back. A dynamic that can feed on itself.

AMC Entertainment Could See A Short Covering Rally

AMC Entertainment (AMC) dropped over 66% from its January 2017 high to its low just ten months later. Since last November, it has made a short series of higher highs under resistance in the $16 area, forming a triangle pattern.

Last week AMC successfully retested the uptrend line delineated by the higher lows. This week it followed up that action by bouncing sharply, taking out both the 50 and 200 day moving averages. Shares were up 7.7% in Tuesday’s session.

There is a 39% short interest in the stock. If it were to rally further, it could spark a covering rally.

The weekly chart shows the five month basing process that followed the 2017 decline. There is a clear transition in the direction of price momentum, but equally important is the steady improvement in money flow. The Chaikin money flow indicator is moving into positive territory for the first time in over a year.

On the daily time frame, the triangle consolidation can be seen in detail. It looks like resistance in the $16 area will be retested again soon. If it is taken out, the pattern’s measured move, calculated by taking the height of the triangle and adding it to the breakout point, will take the stock price back up to the $21 area, and close the gap that formed in July 2017.

The relative strength indicator has moved above its center line but Chaikin money flow is still in negative territory. Money flow will have to improve to support the short covering rally scenario.