Finding, Tracking and Analyzing Growth Stocks


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Learning about and tracking growth stocks in unique industry groups is an ongoing process that can help traders and investors outperform the broader market. This article will provide links to some of the resources from the On Trend episode focusing on growth stocks (Finding, Tracking and Analyzing Growth Stocks). This episode will air on Tuesday and details are shown below. Chartists interested…

RSI for Trend-Momentum Strategies and ChartList Update


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This post will provide a resource link and scan code from the
On Trend episodes focusing on RSI for trend-following and momentum strategies. This is a two-part series that goes from RSI basics to a twenty year backtest on stocks in the S&P 500. These episodes will show how RSI can be used to find consistent and persistent uptrends. RSI ranges define trend consistency and…

RSI Shifts from Bearish to Bullish for EEM


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The Emerging Markets ETF (EEM) experienced a trend-momentum shift over the last few months as RSI moved from its bear range to its bull range. In addition, RSI came close to 70 (69.5) twice and EEM broke above its 200-day SMA. The downtrend reversed and I expect higher prices until the evidence proves otherwise.  

The chart below shows EEM falling into October 2018 and then firming in the last two months of the year. EEM actually showed some relative strength from October to December because it forged a higher low when SPY forged a lower low. This is partly due to strength in China because Chinese stocks account for a third of the ETF. EEM went on to break resistance at the November-December highs and moved above its 200-day SMA. Most recently, the ETF consolidated above the 200-day and broke out of this consolidation this week. Price action

Continue reading “RSI Shifts from Bearish to Bullish for EEM”

Is there a Biotech Breakout in the Making?


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The Biotech SPDR (XBI) is trading at a make-or-break point as it consolidates near the 40-week SMA. Traders should watch for the resolution of this consolidation because it will dictate the next directional move.

The chart below shows XBI surging from the mid 60s to the lower 90s and then stalling with a small triangle. Technically, a small triangle is like a pennant, which is a bullish continuation pattern. A pennant breakout would signal a resumption of the prior advance and target a move to new highs.

At this point, I have a bullish bias on XBI and expect a pennant breakout. Expectations, however, do not always go as expected so we need to consider the alternatives. The breakout zone turns into support in the 85 area. The ETF also bounced off the 85-87 zone two of the last four weeks with hollow (white) candlesticks. A break below this zone Continue reading “Is there a Biotech Breakout in the Making?”

AT&T Makes a Break for It


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AT&T (T) was one of the worst performing stocks in 2018 with a 20% decline and 52-week low in late December. 2019 is starting out much better with a double-digit gain and a break above the November-February highs, which also mark neckline resistance of an inverse head-and-shoulders pattern.

The inverse head-and-shoulders pattern is a bullish reversal pattern that marks a trend change (from down to up). The left shoulder formed from late October to early December, the head with the December low and the right shoulder with the February-March lows. The peaks across the pattern mark neckline resistance and a break above this resistance zone confirms the pattern.

T is breaking above resistance today and the stock is above its 200-day SMA. However, the 200-day SMA is still falling, the 50-day SMA is below the 200-day SMA and the stock is not even close to a 52-week high. Thus, the

Continue reading “AT&T Makes a Break for It”

Weekly Market Review & Outlook – It is What it Is


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S&P 500 Stalls within Uptrend. Upswing Dominates Weekly SPX Chart. Index Breadth Table Remains Bullish. IJR: Failure at 200-day or Mere Correction? Sector Table – Staples Get a Lift. XLI Hits Make-or-break Zone. UTX Consolidates around the 200-day. MMM Consolidates above 200-day. Palladium Takes a Tumble. ChartList Updates. About the Art’s Charts ChartList.
…  S&P

Weekly Market Review & Outlook – It is What it Is


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S&P 500 Stalls within Uptrend. Upswing Dominates Weekly SPX Chart. Index Breadth Table Remains Bullish. IJR: Failure at 200-day or Mere Correction? Sector Table – Staples Get a Lift. XLI Hits Make-or-break Zone. UTX Consolidates around the 200-day. MMM Consolidates above 200-day. Palladium Takes a Tumble. ChartList Updates. About the Art’s Charts ChartList.
…  S&P

TJX Bucks the Selling Pressure


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TJX Companies (TJX) is part of the S&P 500 and the Consumer Discretionary SPDR (XLY). It is also part of two growth ETFs (PWB and PXLG). Even though TJX is part of an economically sensitive sector, I would put them in a different category because they are known as an "off price" retailer for apparel and home furnishings. The stock sports a strong chart and is trading at its high of the year (2019).

TJX held up better than the market in October, but succumbed to selling pressure in November and December. The stock rebounded with the rest of the market in January with a big surge back to the early December high (red zone). After consolidating for a few weeks with a flat flag, the stock broke out and continued higher. TJX is currently above its rising 200-day SMA and appears poised to challenge its October high.

The indicator Continue reading “TJX Bucks the Selling Pressure”

RSI Bear Ranges for S&P 500 and Russell 2000 – ChartList Update


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RSI Holds Bear Range for S&P 500 A Classical Reversal Area for Russell 2000 Small-cap Breadth Indicators Flip Selling Pressure in Key Groups ChartList Updates
RSI Holds Bear Range for S&P 500 The S&P 500 remains above its slightly rising 40-week SMA, but this key benchmark has gone nowhere since January 2018 (60 weeks). $SPX is trading near its January 2018 high

Weekly Market Review & Outlook – Crosscurrents, Undercurrents and Weight of the Evidence


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Bigger Downtrends or Simply Resting? Bank ETFs Fail at 200-day SMAs Small-cap Indexes Fail near Retracements Oil Nears Potential Reversal Zone Focus on the True Leaders S&P 500 Maintains Uptrend Index Breadth Table Remains Bullish Sector Breadth Table is More Mixed Staples, Utilities, REITs and Tech Bonds Extend on Breakout Disney Removed from ChartList Short Russell 2000 ETF Added…

March Turns Rough for Small and Mid Caps


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The Russell 2000 iShares (IWM) is not only lagging the S&P 500 SPDR (SPY) and the Nasdaq 100 ETF (QQQ) in March, but it is also under selling pressure and down month-to-date. Typically, I am not concerned with relative weakness in small-caps when they are simple up less than large-caps. However, we are seeing absolute weakness in small and mid caps, and a large performance discrepancy the…

Trading the Pattern within the Pattern


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There are often smaller patterns within larger patterns and traders can get a jump on a bigger breakout by acting on the smaller pattern first. For example, a cup-with-handle is a bullish continuation pattern that typically forms over a few months. A falling flag is also a bullish continuation pattern, but it typically forms over a few weeks (short-term). I picked these two patterns for a

Third Time Lucky for Advance Auto Parts?


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Advance Auto Parts (AAP) hit a new high in November and then moved into a corrective phase. Keep in mind that a correction can involve a decline or a consolidation, or even a combination of the two. AAP fell back towards the rising 200-day SMA in December and then stalled the last few months. Overall, this looks like a big correction with an even bigger uptrend.

There are signs that this correction could be ending. The stock found support in the 150-155 area three times in the last four months (green zone). The first two bounces did not hold as the stock retested support. The current bounce pushed the stock back above the rising 200-day SMA with good volume. The inset shows a high-volume hammer, a long white candlestick with high volume and a smaller gain with high volume.

Momentum is also improving. The indicator window shows MACD turning up Continue reading “Third Time Lucky for Advance Auto Parts?”

Amazon Makes a Threat


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Amazon is lagging the Nasdaq 100 ETF (QQQ) and the broader market over the last two months because it has yet to clear its January high and remains below the 200-day SMA. This is part of the reason the Invesco Momentum ETF (SPMO) is underperforming the Invesco Minimum Volatility ETF (SPMV). AMZN accounts for 8% of SPMO. Also keep in mind that Amazon accounts for a whopping 22.73% of the Consumer Discretionary SPDR.

Despite some recent underperformance, the stock made a move this week and challenged the January highs. Yep,  Amazon is threatening a breakout. The stock surged with the broader market from late December to mid January and then stalled in the 1575-1750 area the last eight weeks. Within the consolidation, we can see a downswing the first three weeks and an upswing the last eight weeks. A breakout at 1750 would put AMZN back above the slightly

Continue reading “Amazon Makes a Threat”

Party Like its 1999


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Anyone recognize these two phones? A good old indestructible Nokia candy bar was the first phone for many of us. I had a few Nokia cellphones over the years and they always worked great, back in the day. And, we all remember the Nokia ring tone, which was the most played tune in the world as late as 2009. You can hear it about four and a half minutes into this Ted talk (The 4 Ways Sound Affects Us), which is worth watching (and hearing).

Nokia (NOK) and Ericsson (ERIC) were leading telecom stocks some 20 years ago and both took part in the tech-telecom boom of the late 90s. Ericsson crashed when the bubble burst and went dormant for well over a decade. Nokia also fell on hard times and did not find its footing until 2012.

Both stocks have been moving higher since October 2016 and

Continue reading “Party Like its 1999”

Weekly Market Review & Outlook – Large-caps Take the Lead


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20-day Holds above 200-day for S&P 500 Weekly RSI Holds above 50. Large-caps Lead Index Breadth. Tech, Utilities and REITs Lead Sector Breadth. The Dreaded Shakeout (VRTX). Consider Position Sizing (SCWX). Consider Profit Targets (PYPL). ChartList Updates.
…  20-day Holds above 200-day … The S&P 500 sneezed last week and broke below its 200-day SMA, but…

Diodes Returns to the Trend Mean


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Diodes (DIOD), a semiconductor stock, is returning to the trend mean and this could provide a bullish setup to take part in the long-term uptrend.

The chart below shows DIOD with a breakout and surge to new highs in February. Note that the stock also recorded new highs in autumn 2017, summer 2018 and now winter 2019. The long-term trend has been up for over two years.

The red line marks the 200-day SMA, which can also be considered the trend mean or average. The stock has broken this average several times during its overall uptrend, but dips below this trend mean were more of an opportunity than a threat.

After hitting a new high less than three weeks ago, the stock fell back pretty hard (~15%). While I consider this a correction within a bigger uptrend, estimating the length and duration of a pullback is tricky. The stock could Continue reading “Diodes Returns to the Trend Mean”

Seagate Rises from the Ashes


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Seagate Technology was one of the weakest tech stocks in 2018 as it fell around 40% from the April high to the October low. Things appear to be turning about here in 2019 as stock finds its footing and triggers two breakouts.

The chart below shows STX with two lows in the 36 area and a double bottom pattern in play. The peaks between the lows mark resistance (red zone) and the stock broke out with a surge in late February.

The broken resistance zone in the 44-46 area turned into support, and held. Notice how STX fell back to this zone after the breakout with a small falling wedge. The stock held support here with a nice reversal day on Friday and follow through on Monday.

The indicator window shows RSI moving above 70 for the first time since March 2018. There is also a bullish failure swing in Continue reading “Seagate Rises from the Ashes”

Weekly Market Review & Outlook – Everywhere and Nowhere for SPX


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The First Pullback of the Year. A Big Drawn-out Range. Index Breadth Table Update. Sector Table Update. Finance Fails below November High. Retail and Banks Get Pummeled. A Bullish Continuation for Bonds. ChartList Updates.
…  The First Pullback of the Year … The S&P 500 fell the last four days and is down around 2% on a closing basis. On the way, the index broke