Over the past five months the chart of Jacobs Engineering Group (JEC) has made a small saucer-bottom pattern.
JEC has bottomed over the past five months with the 200-day moving average acting as a curving neckline. Notice how the 200-day has capped the rallies since August.
Two positives are the rising 50-day moving average and the uptrend in the On-Balance-Volume line. The rising On-Balance-Volume line has foreshadowed the price action. The Moving Average Convergence Divergence (MACD) oscillator is above zero and rising -- a bullish setup.
Traders could go long on JEC here with a sell-stop at $39 and add to longs on a close above $45.
Nov. 23, 2015 | 3:15 PM
Prices for Dick's Sporting Goods (DKS) have been drifting lower all year, but selling accelerated in the past two months, culminating in what looks like an exhaustion gap -- after a seven-month decline, prices dropped sharply with a surge in volume and a price void, also known as a gap.
Prices have rebounded in recent days, nearly filling the entire gap (see the chart above). We now have a bullish divergence between the lower lows in price and higher lows from the momentum study. DKS looks like it will need some rehabbing after the technical damage. A period of sideways price action would be a good beginning.
Nov. 23, 2015 | 2:20 PM
Things Are Heating Up for Campbell Soup
- A close above $52 is needed for a more exciting breakout.
The chart of Campbell Soup (CPB) has heated up a bit since our last visit on Nov. 11.
The $48 level did indeed act as support for CPB, as the rising 200-day moving average acted as a curving trendline (see the chart above). Prices are now in a position to test and close above the 50-day moving average, giving us another buy signal. The Moving Average Convergence Divergence (MACD) oscillator is crossing bullishly from below the zero line, but a close above $52 is needed for a more exciting breakout.
Nov. 23, 2015 | 1:47 PM
Wal-Mart Is Set to Stage a Turnaround
- Look for a retest of resistance around $65.
Shares of Wal-Mart (WMT) have had a serious markdown this year, dropping to near $55 from just over $90 in January.
This chart of WMT has a couple of interesting features. First, notice how effective the declining 50-day moving average has been defining the downtrend. Second, notice how the On-Balance-Volume (OBV) line has stabilized after the "climax-like selling" in October. Last, we can now see a bullish divergence between the lower price lows on WMT in August and October and the equal lows in the momentum study in the bottom panel. For now, it looks like this bullish divergence is foreshadowing higher prices rather than a Wal-Mart "rollback." In the weeks ahead, I would look for a retest of resistance around $65.