Signs of Life from a Breakout in US Steel X

Jul 30, 2014: 11:58 AM CST

Is it possible that US Steel (X) is finally catching a bid from a breakout (and reversal pattern) from a long-term resistance level?

Could this be the start of a new long-term uptrend in price?

Let’s take a look at the Weekly and Monthly Chart to give us some clues for a longer-term play.

First, let’s start with the long-term “Rounded Reversal” or Saucer Reversal pattern that has developed since mid-2011 to present (mid-2014).

Note the lengthy (multi-year) positive momentum divergence into the April 2013 low near $16.00 per share.

Lengthy positive divergences tend to precede – though not guarantee – long-term trend reversals.

On the swing up (and doubling in price) toward $30.00 per share, we saw volume and momentum surge with price (which is bullish).

So far, 2014 treated traders to a sideways consolidation, but buyers broke price above the $30.00 per share level and then the more important $32.50 level which is not only a multi-year resistance ceiling, but moving average resistance on multiple timeframes (including the 200 week SMA at $29.39). Continue Reading…


Midday Market Update and Stock Scanning for July 29

Jul 29, 2014: 1:24 PM CST

Price provides a choppy Range Day environment for traders ahead of tomorrow’s “Fed Day” announcement.

Let’s chart key levels, note breadth, and highlight the stocks in play for today’s session.

We’ll start with the intraday update of the S&P 500:

Today’s session developed a Range Day or consolidation session between the 1,985 high (the opening gap of July 25) and just under the support (rectangle) trendline low near 1,975 (which is actually a decent 10 point range).

Pay attention to the current 1,980 pivot and the potential bullish upside breakout play toward 1,985 and balance this upward pathway with the logical downward or sell pathway back to the 1,975 low.

Also – for educational purposes to new traders – study the dual divergences (Momentum and Internals) that preceded the recent reversals.

Continue Reading…


Is PLUG Setting Up Another Breakout Run to the Highs

Jul 29, 2014: 10:21 AM CST

Former high-flyer Plug Power (PLUG) could be setting up another bullish breakout and run for the prior highs.

Then again, it could be luring buyers into the stock like a seductive siren’s call.

Let’s take a look at the chart and decide which levels are key for trading a potential bullish breakout and avoiding a Bull Trap.

PLUG shares took two spike-bullish rallies (December 2013 and January 2014) along with two “bull flag” retracements ahead of the early 2014 famous double-in-price from $5.00 straight up above $10.00 per share.

After the parabolic rise (see today’s earlier post on Intel’s INTC Parabolic Arc), a climax occurred for a violent V-Spike trend reversal lower as shares collapsed from the $11.00 per share high.

Shares consolidated and stabalized into the $4.00 per share horizontal support level and built a base from which buyers could rally (bid) the stock higher to continue the uptrend at a more normal upward pace.

That’s what we’ll be watching in the weeks ahead for PLUG shares:

To what extent can buyers bid shares higher to continue the uptrend without overheating the stock and seeing a repeat pattern of the parabolic arc then collapse?

For now, keep a close watch on the current spike high from July 22nd above the $6.00 per share level. Continue Reading…


Are You Following this Stellar Parabolic Arc in INTC

Jul 29, 2014: 8:49 AM CST

If you haven’t charted or traded Intel (INTC) in a while, you’re missing an amazing “arc trendline” or exponential rally pattern.

Let’s take a look at the pattern, compare similar examples, and plot a potential future for this newly high-flying stock.

I wanted to start with a pure-price trendline view of the exponential growth (rise) in INTC’s stock price.

Starting with the late 2012 low, price began a new uptrend that developed a stable rise that culminated in mid-2014’s parabolic trendline arc.

These patterns are usually dangerous and deceptive and draw new traders into the raging river of a straight-up price movement.

As professionals or experienced traders can tell you, these patterns rarely end well for the buyers.

Nevertheless, these patterns often continue longer than most traders expect and in the process, they can devastate the accounts of the (eventually correct) short-sellers or bears.

The general outlook is to follow price or trade aggressively within the upward rise ahead of a likely reversal.

Short-sellers should avoid the stock until it breaks through the rising vertical trendline which currently overlaps the $34.00 per share level. Continue Reading…


July 28 Monday Midday Market Update and Stock Scan

Jul 28, 2014: 1:09 PM CST

It’s time to take a look at what’s happened this morning, what Breadth is saying, and which stocks are potential Trend Day candidates as we start this final week of July 2014.

We’ll start with the intraday update of the S&P 500:

We had a quick and volatile turn-around (reversal) up off the 1,970 index level as positive divergences AND a rising TICK Channel suggested the selling pressure may be coming to an end.

This was indeed the case as a violent reversal short-squeezed sellers out of the market after an initial price dip off the open.

Monitor price into the current 1,980 index level and horizontal rectangle area between 1,975 and 1,979.

Continue Reading…

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