Like other stocks we have pointed out in the past two months, Eaton Vance (EV) has made a small double-bottom pattern in August and September (see chart below).
In this chart of EV, above, we can see that the On-Balance-Volume (OBV) line is improving irregularly. We are above the 50-day moving average, and the average line is pointed up. EV is close to a test of its 200-day average, which would be positive, and the Moving Average Convergence Divergence (MACD) oscillator is above the zero line -- also positive.
This longer-term chart of EV, above, shows a three-year sideways market. Recently, the OBV line has turned up and the MACD oscillator gave a positive crossover. These longer-term improvements, with a positive short-term view, should prompt further gains for EV into year end.
Nov. 24, 2015 | 10:45 AM
Dollar Tree's Earnings Miss Doesn't Damper Long-Term Outlook
- DLTR could test around $75 in the weeks ahead.
Dollar Tree's (DLTR) positive-looking chart and indicators provide support for further year-end gains.
DLTR, chart above, topped out early in 2015, but only came under pressure in August. The On-Balance-Volume (OBV) line turned lower and DLTR broke below the 50-day and 200-day moving averages. We can see a bullish divergence in September and October, and we just made a higher high on the chart as the 50-day moving average turns up.
The longer-term view of DLTR, above, shows a flattish OBV line and the Moving Average Convergence Divergence (MACD) oscillator turning. With a positive short-term view, DLTR could rally back to test the underside the 40-week or 200-day moving average around $75 in the weeks ahead.
Nov. 24, 2015 | 10:15 AM
Dollar General Hasn't Bottomed Out, Yet
- Price and momentum indicators are giving off bearish signals.
Even though Dollar General (DG) has corrected lower, it has not yet bottomed, so we would not bet our bottom dollar on DG yet.
In this chart of DG, above, we can see how DG broke down in August, falling below the 50-day and then the 200-day moving averages. A dead cross is visible in early October as the 50-day fell below the 200-day average. The On-Balance-Volume (OBV) line is pointed lower, suggesting that selling is more aggressive than buying and liquidation is still the order of the day. There are no bullish divergences between price and momentum, so no foreshadowing of a turn around.
This longer-term chart of DG, above, does not advance the idea of a bottom anytime soon. Here, DG is below the 40-week moving average and the average line is weakening. The OBV line is not helping, and the Moving Average Convergence Divergence (MACD) oscillator is down. With weak short-term and longer-term pictures, DG could grind down to the lower end of chart support -- around $55.
Nov. 24, 2015 | 9:30 AM
Hewlett Packard's Short-Term Base Could Generate Long-Term Rally
- Add to longs when the resistance around $15 is broken.
Over the past four months, Hewlett Packard (HPQ) has made a base pattern on the chart that can support further near-term gains.
In this chart of HPQ, above, we can see the base pattern that HPQ has outlined the past four months. HPQ is now above the 50-day Simple Moving Average and the slope of the moving average is positive. HPQ has also rallied above the 200-day moving average, but that average has yet to turn up. The coincident to leading On-Balance-Volume (OBV) line is bottoming, and we can see the result of the bullish divergence back in August and September between the lower lows in price and the higher lows from the momentum indicator. This chart also shows that there is some overhead resistance around $15. HPQ will need to push through that area.
This longer-term view of HPQ, above, suggests that the short-term base noted above could generate more of a rally. Here we see that HPQ has rallied above the 40-week moving average, and that there is a bullish crossover from the Moving Average Convergence Divergence (MACD) oscillator. The longer-term bullish divergence from the momentum study is also supportive.
Traders could go long HPQ at current levels, with a stop-loss below $13, and add to longs when the resistance around $15 is broken. The advance could carry into the upper teens.