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Expert technical analysis of financial markets by JC Parets

Betting On The Best Gamers

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From the desk of Steve Strazza @Sstrazza

When going over some of this week’s content ideas with JC, I told him “I can’t possibly write another post about Tech stocks, but I want to.”

His response was simple: “That’s information.”

In other words, based on the thousands of US Equities charts I’m looking at each week, the strongest uptrends continue to be in Technology $XLK. The fact that it almost seems too good to be true, or that I feel like I’m beating a dead horse about “tech, tech, and more tech” – is all the more reason to remain bullish.

We can’t change the fact that there’s a lot of good stuff going on in the space right now. We can only interpret the data in front of us, and right now, it’s saying we should keep buying Tech.

[Read more…]

Bank Stocks On Breakdown Watch

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Financials are what we’re watching very closely this week as a warning of a more substantial stock market correction throughout the summer.

Our strategy has been to buy stocks that are going up. That’s worked well. But if you noticed, that has NOT included financials. It’s been mostly in the Technology, Internet, Social Media, Biotech & Mobile Payments sectors. That has been our go-to universe during this multi-month rally in stocks.

However, even though we haven’t been buying bank stocks, that doesn’t mean we just ignore them. Quite the opposite, in fact. If you recall, it was the bank stocks that helped us get so bearish in early February, well before any market crash. We are focused on this group again today for the exact same reasons: Risk Management.

Here is a chart of Financials flirting with that 23 level. That represents the former highs from April. If we’re below that, the risk in here is down, and not up: [Read more…]

Reminder: Stocks Go Up AND Down

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Outside of India, many major indexes like the S&P 500, have yet to recover above their resistance levels we outlined two weeks ago. With that said, prices have yet to collapse either.

Instead, what we’re seeing is prices digesting their gains and setting up for their next move…in whatever direction that may be.

Inside of India, we’re seeing the major indices experiencing their first real day of selling after a strong run off of the June 12th lows.

In this post, we’re going to provide some perspective on the question many are seemingly asking, “was that it for stocks?”

[Read more…]

Under The Hood (06-23-2020)

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From the desk of Steve Strazza @Sstrazza.

Last week, we introduced our new weekly column called “Under The Hood.” You can read more about it here.

Basically, we are looking at a universe of the most popular stocks on Robinhood measured by the net increase in accounts holding them week-over-week. Then we’re drilling into the charts to find opportunities to either join in and ride the momentum in these names higher, or bet against those that get too frothy.

Here is this week’s list. It represents the top 60 stocks that experienced net increases in ownership among Robinhood users last week. We’ve also included their weekly performance.

[Read more…]

Reliance Has 35% More Upside

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Reliance Industries is the largest component of the Nifty 50 at nearly 12% of the index’s weighting, so when it moves, we need to pay attention.

The stock has come a long way since its March lows, so we want to take a look at where it’s come from and what its recent break to new all-time highs means for its future.

[Read more…]

Charting School: Fibonacci Analysis on Abbott Labs

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I get asked a lot about Fibonacci and why I use it so often. If by now I haven’t made that perfectly obvious, the reason we use it is because it works! Fibonacci levels help us set price targets and, most importantly, manage risk. The market tends to respect these levels, so it would be foolish for us to ignore them.

In our NEW Charting School, I explain exactly how I calculate these levels and walk you through a bunch of real life examples where they helped us over the years. You can watch Lesson 1 here for Free, and then decide if you’d like to continue with the rest of the course.

Today I want to walk you through the process of analyzing shares of Abbott Labs. But first, why Abbott Labs? Why am I interested in this name?

Well, Medical Device stocks are starting to come up in conversation with regards to the continued sector rotation we’ve been witnessing in recent months. When I think about these stocks, I immediately laugh because they’re really Tech stocks, stuck in an otherwise disappointing healthcare sector (relative). Look at the charts of the Medical Device stocks. They look like the charts of the best Tech stocks, and certainly not like most Biotech or Pharma names, for example.

So with that “Tech in other sectors” concept in mind, we turn our attention to the biggest names in Medical Devices. $ABT is right near the top of that list representing 14% of the Dow Jones U.S. Select Medical Equipment Index. We want to calculate the long-term Fibonacci extension levels based on their initial and largest correction. In this case the 1999-2007 correction, as you can see here below: [Read more…]

Last Week In Review (06-19-2020)

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From the desk of Steve Strazza @Sstrazza

For the week ended Friday, June 19, 2020:

Every week we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Despite some volatility in the second half, risk assets continued their steady march higher last week. The broadening participation from Equities was again evident as every major US and Global Index was higher with the exception of Dow Utilities $DJU.

We’ve written extensively about the strongest areas and those first to reclaim their highs. In this post, we’ll highlight a handful of Equity ETFs/Indexes which are at or just beneath fresh highs. Whether these areas work through their overhead supply or get rejected at these key levels will provide important information into the strength and durability of the current rally.

[Read more…]

Five Bull Market Barometers (06-19-2020)

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In early May we outlined the “Five Bull Market Barometers” we’re watching to identify the beginning of a new bull market in stocks.

If you haven’t read our initial post linked above, we’d encourage you to check it out so you understand what the rationale behind these five indicators is.

Now, let’s see where we stand after another strong week in the market.

[Read more…]

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