Electronic Arts (EA) surprised to the upside yesterday on earnings but failed to impress traders with tepid future guidance and we’re seeing a sharp gap-down and sell-off from the recent highs. Let’s take a look at this strong trending stock, note two prior ‘pullback’ scenarios, and chart the probabilities of what to plan now. Here’s…
Traders are often drawn to reversal patterns, and Lululemon (LULU) gives us a textbook lesson in how to recognize and then trade reversal patterns as they develop. Let’s take a look at this large Distribution Top pattern and learn the lessons we can apply to similar situations in the future. Large scale price moves (the…
As traders, we’re constantly looking for changes in the trading environment especially when things that are less common or rare become more common. This is the situation we’ve been seeing with respect to the persistent rally in the market and how we study (and adapt to) what has changed. Let’s take a quick look at…
Apple shares (AAPL) continued their breakout and bull trend impulse after the late-April gap breakout and May “bull flag” retracement. Let’s chart the current course for price, highlight the key support target, and update the trading strategies developing at the moment for Apple shares. We’ll start with the broader Weekly Chart perspective: For a bit…
I wanted to take a quick look at the current strong rally and objectively compare the degree the market is overextended now and how that compares with the past (particularly the 1999 rally). Let’s take a look at two S&P 500 Charts and plot the ‘overbought’ distance from trending moving averages. We’ll start with the…
Recent swings and reversals in commodity markets give us an example to study lengthy divergences and reversal trading tactics. Let’s take a look at these larger reversals, note the supply/demand shift, and the dual divergence chart signals that preceded these reversals (for lessons of identification and trading similar situations in the future). We’ll start with…
Keurig Green Mountain (GMCR) triggered a Bull Flag support bounce and breakout play on the Daily Chart I wanted to highlight – it can serve as a candidate and great educational lesson. Let’s study the chart, note the levels, and learn a quick lesson from this popular pattern. Generally, a breakout is a sign of…
Savvy traders know to treat “Fed Days” differently than normal trading sessions while new traders often get tripped up by the sudden volatility or instant shift in the rhythm of a trading session. Let’s take a quick look at today’s “Fed Day” action and segment the day into “Before Fed” and “After Fed” to note…
Intuitive Surgical (ISRG) is the weakest performing stock today (largest percentage loser) in the S&P 500 which prompted me to investigate more about this stock and its chart. A quick glance at the Daily Chart shows a “Break and Fake-out” situation along with a sudden reversal back to the breakout price. April 1st triggered an…
Students of Market Internals know that Friday’s and Monday’s sharp downside reversal in the US Stock Market was a likely outcome from the message sent from market internals. However, that’s not the complete picture, nor is it as simple as “Divergence Equals Reversal.” First, take a moment to review my “Charting Market Internal Divergences at…