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All Star Charts

Expert technical analysis of financial markets by JC Parets

[Premium] Deep Dive Into Homebuilders

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From the desk of Tom Bruni @BruniCharting

Today’s mystery chart reveal post highlighted the potential opportunity in the Homebuilder ETF ($XHB) as it sits at an important inflection point within a longer-term uptrend. In the post I highlighted that although there is mixed performance among the components, the reward/risk is still skewed in favor of the bulls at current levels. As a follow-on to that, this post will be highlighting some of the best and worst stocks in the sector along with our risk management levels and targets for each.

Click on chart to enlarge view. [Read more…]

Mystery Chart Revealed

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From the desk of Tom Bruni @BruniCharting

Last week I posted the mystery chart pictured below to see what people were thinking once they removed the biases of knowing the security name, timeframe, or etc. and had only price to rely on.

Well, the *rough* results are in and

  • 50% said do nothing because of the opportunity cost;
  • 25% said buy; and
  • 25% said sell

[Read more…]

How To Bottom Fish Responsibly

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From the desk of Tom Bruni @BruniCharting

The news broke last night that Twitter will be replacing Monsanto in the S&P 500 on June 7th. This announcement comes at a time where Twitter is hitting 3-year highs and is trending higher with the rest of the social media stocks and tech sector. The stock is still down 49% from its all-time highs hit in 2013 and was the butt of Wall Street’s jokes not too long ago, but its recent run presents a great opportunity to study what characteristics to look for when trying to pick a bottom in a stock, the responsible way. [Read more…]

Technology Is Beginning A New Leg Higher

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When the biggest sector in the S&P500 representing 25% of the entire index makes an all-time daily, weekly and monthly closing high, it’s probably worth paying attention. I also hear the lazy people talk about how Technology is being led by just a few names. This is simply not true as the Technology Equal-weight index is also breaking out to new highs. We’re seeing a broad based rally in Tech, and it’s not something new.

I’ve been pounding the table on Technology because it’s been outperforming on an absolute basis, but also on a relative basis. Tech is not just going up, it’s beating all the other sectors. Here is the Equally-weighted Tech Index Fund $RYT breaking out of a 4-month base to new all-time highs. New highs are a characteristic of uptrends, not downtrends: [Read more…]

Following Up On That March Island Reversal

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Remember that Bearish Island Reversal in the Nasdaq in March? I wrote a whole note about it pointing out that it was now going to be a problem. The fact that the Nasdaq broke out to new all-time highs, and then failed hard, was evidence of an overwhelming amount of supply for stocks relative to demand.

I mentioned at the time that it was most likely going to resolve through time, rather than through a severe downside correction in price. The reason was that this was just a brief 2-month breakout and not a massive top or reversal. I said that the sooner we can get through that 7000 level, the stronger the market we’re in from an intermediate-term perspective. Not only was this a risk management tool, but also as a source of information: strength or weakness in this case.

Fast forward just 10 weeks later and we’re now breaking out above key resistance once again. [Read more…]

These Are The Trends In U.S. Stock Market Indexes

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It’s very easy to get caught up in the day to day noise of the market, especially if you’re allowing toxic media content into your life. It’s virtually impossible for us to completely ignore it all, although I do try my best. So, at the very least, we want to be aware of what type of content we’re consuming and the conflicts of interest that are driving it. But another, and much easier way to avoid getting lost is simply by taking a step back. Monthly charts allow us to see the forest through the trees and is one of the most valuable parts of my entire process.

Even if you’re a day trader or short-term swing trader, I think it’s a huge advantage to understand the direction of the underlying trends. For me, who specifically looks out weeks and months, trying to make money this quarter, my monthly candlestick chart review is essential. I can’t begin to tell you how much this has helped me avoid blindly calling tops or bottom fishing in never ending downtrends. It most certainly helps us err in the direction of the underlying trends which, of course, increases our probabilities of success. [Read more…]

Two Global Stock Market ETFs to Watch

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From the desk of Tom Bruni @BruniCharting

The US Dollar Index is up roughly 7.5% since it’s February lows, a move that has hit many of the global stock market ETFs we follow due to their local currency exposure. The Frontier Markets ETF $FM is among those hit hardest, down roughly 16% since late January. With that in mind, we like to focus on strength and there are three global ETFs that continue to hold up well and should lead if/when strength in the US Dollar subsides.

Click on chart to enlarge view.

[Read more…]

[Premium] Deep Dive Into The Biotech Sector

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From the desk of Tom Bruni @BruniCharting

If you’ve been reading our content over these last few weeks, you’ve likely noticed we’ve been performing a lot of deep dives on the sectors we want to be involved in on the long side like Solar, Energy (premium), Retail, and Software (premium). Healthcare in general has been a laggard and the Medical Device space continues to lead, but now we’re seeing Biotechnology start to break out as well. In this post we’re focused on the equal-weighted Biotech ETF $XBI, as the cap-weighted $IBB is lagging significantly and remains weak. This out-performance by the equal-weight sector ETF signifies a broad-based rally is underway, so we’re looking for the best names in the sector to take advantage of this theme.

As the daily chart below shows, the XBI has tried several times over the last six months to clear resistance at its 2015 highs of 91. It’s failed to hold this breakout twice before, but is taking another shot at it. The fact that the broader market has found its footing again should be a decent tailwind for this trend to accelerate and confirm a successful breakout. Our 120 price target for this breakout is approximately 30% above current levels, so in the rest of this post we’ll be looking at some individual names that look poised to lead this sector higher.

Click on chart to enlarge view.
[Read more…]

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