A Well-Contained Rally
From the semis to the Transports to the S&P, rallies off of support are being contained or turned away by resistance. Plus, hurray for the banks, a look at Palantir and much more.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
The Market
It was definitely not a Mag 7 type of day. But even among the others it was still mixed.
I love that the banks are rallying but I do want to point out that the Bank Index has finally filled the gap from almost one year ago (blue line) and resistance gets heavy again in this area. Also that consolidation from December through March measures to 103-105.
I also like that the SOX rallied as it should have. But you can see it got turned away from that resistance at 5000. I would like to see it come down to 4800 and fill that gap. Then it has to hold there. The pullback will tell us a lot about the strength of the semis now.
The Transports also rallied from support. Their resistance starts around 16200.
Then there is the line, or the lines. We pretty much tagged the underside of the upper line on the S&P 500. Sure, we can give it another try but I think we’re going to find that the upper line will continue to contain the rallies; after all, the DSI for the S&P is now at 82.
Finally, the Nasdaq’s new highs continue to lag but the S&P finally exceeded the December reading with 440 new highs. That’s probably due to the banks (I haven’t read the list yet).
New Ideas
FedEx FDX, a member of the Transports, had earnings folks liked after the bell. Here’s what I’m going to watch on the chart. That gap gets filled around $280. If the stock gaps up and over $285 and can hold it that would be quite bullish but I suspect that $280-ish area keeps it contained on this trip up.
I have been a fan of Palantir PLTR for a while but the action of late is not inspiring and is now concerning. If it can’t get over $26 and instead comes down to $23 (and breaks) it will complete a head-and-shoulders top.
Today’s Indicator
The 21-day moving average of the ISE call/put ratio is heading down, which ought to be bearish but in this market that hasn’t been the case.
Q&A/Reader’s Feedback
Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.
3M MMM has had a great run right to resistance. While it doesn’t seem to be running out of steam it’s hard for me to get excited when it’s run nearly 20% in two weeks. Using the weekly chart we can see the resistance. My guess is it backs off and rallies again. I just don’t have a good feel on where it can back off from. I’m going to call it a hold if you own it and hopefully I can follow up at some point if it pulls back and note that it is buyable.
I recommended General Electric GE back in November and even I can’t believe the run it has had. It has done absolutely nothing wrong. But any measured targets have been exceeded. As long as it holds over that uptrend line I’d hang on to it, although I wouldn’t scoff one bit if you wanted to sell a little up here.
Lam Research LRCX is a member of the SOX, a group I liked two days ago for an oversold rally. Now it has to contend with that early March high so if you bought it well, great for you, take a little off the table here. I would like to see how it handles that $950 area should it come down there because if it fills that gap, say late next week, and at the same time it is tagging that uptrend line I’d probably think it was okay to buy for a trade again. But I’d have to see if that plays out.
