After Wednesday’s strong rally that left no sector behind, here are four weekly charts of interest for the rest of the week.
Check out the weekly chart of CBS Coropoation (CBS). A well-defined inverse head and shoulders pattern has formed under a declining neckline. Money flow is in positive territory and the relative strength index is bouncing off its center line.
A weekly close in upper candle range would suggest that next week there would be an attempt to break through neckline resistance.
We’ve mentioned the potential breakout on another weekly chart. KushCo Holdings (KSHB) is a cannabis packaging and marketing company. Its stock price has broken above a large triangle pattern. Now it needs to hold near its current level going into the end of the week.
In this recent period of volatility in the market, we have been using weekly charts more to put daily trades into context. Here is the Southwest Air (LUV) chart and it shows the stock price bouncing off long term support in the $49 area.
It appears that positioning to the long side with this stock has a good risk/reward ratio.
NutriSystem (NTRI) shares have been pressing up against a long term downtrend line. The stochastics oscillator is bouncing off its oversold level suggesting a potential breakout move.
More importantly, the Chaikin money flow reading indicates the stock has been seeing buying interest down below the $37.50 area. An upper candle close that pierces the trend line is bullish.
Trading weekly charts requires deeper stops and consequently smaller position size to limit losses. While this strategy also limits profits, it helps prevent whipsaws in volatile markets and allows your trading thesis time to play out.