Prices of the nearby crude oil futures contracts have been "bumping around" the low $40s for weeks (see the chart below). Meanwhile, our favorite momentum study has been moving sideways in a tighter and tighter range.
We get an unscientific sense from reading media reports and various market letters that traders and analysts seem to be mostly bearish on crude oil (and metals and commodities in general). Sometimes when too many market participants and analysts are negative on a security, it is more likely to surprise on the upside. Not sure what it is, but maybe it is just that players are caught "offsides" and they need to quickly adjust their positions. We are not suggesting you go long on futures or even ETFs based on energy contracts, however; we think that there might be more chance for crude oil futures to trade higher the next several weeks. Shorts, be on alert.
Nov. 25, 2015 | 3:15 PM
Goodyear Tire Still Rolling Higher
- We have a price target in the mid-$40s.
While some auto manufacturers may be stuck in neutral, shares of Goodyear Tire & Rubber (GT) could roll higher.
GT has been traveling higher all year (chart above), and it has the positive technical indicators to prove it. Prices have moved up in a stair-step manner with former resistance becoming new support. The 50-day moving average is above the 200-day and both have a positive slope. The On-Balance-Volume (OBV) has been rising all year -- confirming the advance.
GT has more than doubled the past three years (chart above). The indicators remain positively aligned for GT. Prices are above the rising 40-week moving average. The OBV line on this timeframe is also bullish. The MACD oscillator is bullish and above the zero line. With the recent new high in price for GT, our point and figure chart (not shown) gives us a price target in the mid-$40s.
Nov. 25, 2015 | 2:45 PM
PPG Industries' Glass Is Half Full
- We look for PPG to trade up into overhead resistance in the $110 to $120 area.
PPG Industries (PPG) has had a good run off its late September low, but some further modest gains lay ahead.
Prices declined for three months starting in July, but a quick reversal happened at the end of September (chart above). Prices have made a higher low in November and recently a higher high. The On-Balance-Volume (OBV) line has turned up modestly and the slope of the 50-day moving average is positive. PPG is poised to test, and hopefully break, above the declining 200-day average. With no bearish divergences between price and momentum, we look for PPG to trade up into overhead resistance in the $110 to $120 area -- $115 is our target.
This longer-term chart, above, of PPG is underwhelming -- the OBV line is pretty flat/boring. The 40-week moving average still has a downward slope, while the Moving Average Convergence Divergence (MACD) oscillator has crossed but from below zero. Traders can stay long PPG looking for further gains, but sell-stops should be raised to just below $100.
Nov. 25, 2015 | 1:45 PM
CyberArk Software Bears Should Go Into Hibernation
- There may be some light at the end of this volatile tunnel.
Trading in CyberArk Software (CYBR) has been pretty volatile over the past 12 months. Prices have been on the defensive for the past five months, but we may have some light at end of the tunnel.
It is always good to get the negatives out of the way first. In this chart of CYBR, above, we can see a dead cross in late September and several tests and rally failures to the declining 50-day moving average. On the positive side, we can see a double bottom on the On-Balance-Volume (OBV) line in September and November, even though prices made lower lows. We can also see a bullish divergence between the lower lows in prices in September and November and the equal lows from the momentum study.
While we have only limited history on this chart, above, we can see that the $40 level (a former resistance area) should be support, and we have a higher low on the momentum study on this time frame. Bears should go into hibernation. Bulls on CYBR should consider the long side, here, using $35 as a risk point.
Nov. 25, 2015 | 1:15 PM
Look for Yuan to Turn Lower
- Price action suggests that China could allow another devaluation at any time.
The holidays are a time when traders take time off and the pace of trading typically slows. Unfortunately, it is the slow times when currency moves can have the greatest impact.
This chart of the Chinese Yuan, above, suggests that the Yuan will weaken again. The Yuan has broken its downtrend and has made a higher high and a higher low. Our 20-day momentum study is in an uptrend (lower panel). We have no inside track, but the price action suggests that China could announce or allow another devaluation at any time.