Saturday, July 28, 2012

To Vegas and Jacksonville, Part 3

July Fourth, the holiday that enabled my ducking out of work and onto this trip, not least because United’s cheap fare was a function of the light holiday demand, began with my waking much later than I’d hoped. It’s not that the sleep-number bed at the Radisson Jacksonville was exceptionally comfortable; rather, I was exhausted after the prior night’s red-eye “pilot-in-command”-ing, er driving, from the Bay Area to the Las Vegas McCarran airport.

I had envisioned pulling myself into the shower at 6am and savouring the city some more through the vessel of a local coffeehouse and, perhaps, a greasy spoon breakfast joint. Instead, I was executing yet another controlled-panic drive to the airport. Fortunately, these are my specialty, and I timed it at the sweet-spot: only modest speeding and not quite breaking a sweat, both on the highways and in the airport corridors, and arriving at the gate with boarding well underway, but before the final call.

The partially-obscured CR7 that would ferry me to O'Hare

The late morning brought another CRJ-700 ride between JAX and a United hub, just like the prior day’s journey down the eastern seaboard from Dulles. This time, though, I was enroute to Chicago. Once onboard and again in seat 2A thanks to an upgrade -- amazingly, this would be my seat assignment on all five segments of this trip -- I took a quick call before the door was closed. As it happened, the call was in Polish, my Muttersprache, which the front-cabin flight attendant picked up on and then proceeded to use in our conversation for the entire flight. Kava z mlekiem? Bardzo prosze!

The flight to O’Hare was expeditious and lovely. Wheels-down was over thirty minutes before scheduled arrival, and the preceding approach routing onto 27L provided the usual blitz-glimpses onto the Chicago neighbourhoods that are nearest to my heart. Notable, also, is that flight service featured the United Express First snack box, an admittedly cheap offering but nonetheless better than nothing, especially for the frugal traveller.

Stock image of a United Express First snack box (source: Yelp)

The day brought its sine qua non upon my stepping into the B concourse. My Polish-language conversation partner, my lovely dad, was waiting at the Terminal One curb and would host me for a few relaxing yet high-gear hours. Good conversation and a stocking up on addictive Polish poppy seed cake were among the afternoon’s activities, before the hour indicated that the next departure would soon be at hand. And so the day’s second iteration of the aggressive dash to the airport followed, this time down the Kennedy (traffic clearing after Sayre Ave. as always) and I-190 to that same Terminal One curb. A kiss goodbye, the security dance, and into seat 2A with the remnants of the boarding mass some 8 or 9 minutes later.

High clouds encountered at cruise altitude while enroute ORD-SFO

There’s little to report on this standard A320 journey between O’Hare and San Francisco. The holder of seat 1C asked that I switch seats, to which I gladly acquiesced. My seatmate was a tad on the talkative side -- usually a bad sign -- but he mercifully withdrew his aggressive conversation attempts once we leapt into the realm of Icarus from 32L. The meal wasn’t half bad, although its details escape me as I write 24 days later. I do, however, recall that my request for a glass of milk to accompany the dessert of chocolate chip cookie was met with a knowing smile by the motherly lead FA. An alcohol-catalyzed nap for most of the flight’s remainder followed.

A strikingly sharp heavy glimpsed while within SFO's friendly confines. This A340 would operate Swiss 39 to Zurich.

Despite San Francisco being the current home for my luggage, the evening had one more flight in store: San Fran to Vegas, just after nightfall. This being the Fourth of July, our departure routing from SFO -- northbound over South San Francisco, then turning making a gradual and wide turn west, south and eventually southeast to bring us down the west side of the Peninsula and over San Jose -- afforded a brilliant view over the dozens of firework shows, professional and amateur alike, going off simultaneously across the Bay Area.

Dinner from Laurita's
Rather exhausted, I proceeded to enjoy a plate of awesome local Mexican grub from Laurita's taco shop, just a bit southeast from the airport. And then: well-earned sleep.

Tuesday, July 24, 2012

Baidu (BIDU) shows a bull flag in a bearish market

Baidu (BIDU), the Chinese dot-com and NASDAQ-100 component, are up about 7 percent today, with about 30 minutes left until the close of trading. An impressive post-earnings pop, particularly given that the broad market is down about a percentage point.

BIDU, today (July 24), 1 minute candles

The 1-minute candles chart of BIDU shows that the stock is making a bull flag formation today. A break through the upper trendline of the downward-sloping price channel would be considered a buying opportunity.

Thursday, July 19, 2012

Dollar Tree (DLTR), Green Mountain Coffee Roasters (GMCR), Medtronic (MDT) dazzle; markets higher

Dollar Tree (DLTR) displayed a bullish chart pattern on its hourly-candles chart, Green Mountain Coffee Roasters (GMCR) strongly hinted at a forthcoming short-covering rally, and Medtronic (MDT) dazzled with rare deja vu price action over its past two sessions.

The broad markets added to yesterday's gains. With the closing bell today, July 18, the S&P500 added 0.7%. The NASDAQ Composite tacked on 1.1%, and the Dow Jones Industrial Average was 0.8% in the black.

Dollar Tree flashed a technical buy signal with a late-day pullback to support from a 1-month price channel (shown below in grey), through which it had bullishly pierced yesterday. A pullback to the boundary of a violated channel is often a precursor to further movement in the direction of the breakout, in this case upward.

DLTR, May 1 to present, hourly candles

Green Mountain has dramatically fallen out of favor with the market over the last year; current price is almost 85% below the 52-week high. Price channels nonetheless indicate that the current price of $18.00 is a sound candidate for a local minimum, both on the security's daily-candles and hourly-candles charts.

GMCR, four years, daily candles
GMCR, 180 days, hourly candles

The 5-minute candles chart of GMCR shows capitulation on Monday, with price accelerating downward and volume spiking. Capitulatory price action is sometimes a precursor to a change in trend, at least for the short term. Extreme caution is warranted though, not least because the last two days have seen the formation of a descending triangle, which is often a trend continuation pattern, i.e. bearish in this case.

GMCR, 10 days, 5-minute candles
Medtronic, finally, provided an interesting and rare instance of deja vu on its 5-minute candles chart; today's price action was a near mirror image of yesterday's. 

MDT, 20 days, 5-minute candles

Monday, July 16, 2012

Symantec Corp (SYMC) hints at a technical rally

Symantec Corp (SYMC) has today touched a fresh 22-month low, but its chart nonetheless holds potential promise for bulls.

First, though, a word about the broad markets. These closed modestly lower after Friday's significant rally. The S&P500 ended 0.2% in the red, while the NASDAQ and Dow Jones Industrial Average each shed 0.4%. The bottoming tail candle on the DJIA hourly candles chart mentioned in a post from this morning managed to hold.

The big-picture view of SYMC is decidedly bearish. As already mentioned, the stock is trading at lows not seen since August 2010. The 13-dollar stock is more than $3 below its 200-day simple moving average (SMA). And yet, all is not bearish: SYMC is currently nudged right against 2-year price channel support.

SYMC, Jan 2010 to present, daily candles

The hourly candles chart also shows SYMC at price channel support, this time with regard to a channel stretching from late April. Meanwhile, the 5-minute candles chart is modestly bullish, with price action surpassing the resistance line of a 6-day channel and meeting its 200-period SMA (5-minute candles).

SYMC, Feb 1 to present, hourly candles
SYMC, 10 days, 5 minute candles

To be sure, a long position in SYMC would need a tight stop-loss point, probably no lower than a few cents below $13.00. While many instances of securities' encountering their 2-year price channels are met with a change in trend, there are no certainties with regard to the markets.

Copper futures (/HG) are poised to rally

Copper futures (/HG), a security that conforms to price channel modeling very nicely, may be on the verge of a rally. The contract may be about to break through the resistance side of a 7-month price channel; price at $3.51 or $3.52 would signify a break.

Adding conviction to the bullish side is that price action already withdrew slightly from this price channel resistance on Sunday evening (US time) and now knocks on the door again.

Bullish sentiment is strengthened by looking at the 200-period simple moving average (SMA; based on 4-hour candles). Price recently broke above this measure of sentiment, and the difference between current price and the SMA is near the 5-month high, which was set last week.

A method of expressing interest in copper is through JJC, the most liquid of the copper ETFs on the market.

/HG, 180 d 4h

Dow futures (/YM) hourly chart displays a bottoming tail candle

Markets opened bearishly today (Monday, July 16), but the Dow futures contract (/YM) -- a proxy here for the overall market -- has put in a bottoming tail candle within the last hour. Moreover, the bounce is occurring from a moderately-defined price channel.

The chart of May 30 to the present (hourly candles) appears below:

/YM, May 30 to present, hourly candles

Friday’s rally vaults the S&P500, NASDAQ, and DJIA indices off a technical support level

Markets rallied strongly in Friday’s trade: the broad-market S&P500 added 1.7%, the NASDAQ Composite tallied up a 1.5% rise, and the Dow Jones Industrial Average split the difference with a 1.6% advance.

In the case of all three indices, Friday’s rally – which actually began with intraday price action on Thursday afternoon – has provided a lift from 2-month price channel support.

Nonetheless, despite their prima facie similarity, the 2-month price channels for the three indices were not formed identically. In the case of the S&P500 (SPX), the better-defined channel boundary is the upper resistance line, which connects the local maxima on 5/22, 5/29, 6/20, and 7/3, along with intraday, hourly local maxima or minima on 6/19. The parallel lower resistance line, then, links local minima on 6/25, 6/28 and 7/12, along with intraday, hourly local maxima or minima on 6/1 and 6/5. Needless to say, see the screenshot below for the helpful graphic.

SPX, 180 d 1h (zoomed in to 5/9 to the present)

In contrast, the 2-month price channels on the Dow Jones Industrial Average (DJX) and NASDAQ Composite (COMP), from which Friday’s rally launched, formed in somewhat different fashion. The DJX channel does not connect the highs of the July 4th rally, for instance, and the COMP channel does not connect the lows of 6/28.

DJX, 180 d 1h (zoomed in to 5/9 to the present)

COMP, 180 d 1h (zoomed in to 5/9 to the present)

Friday, July 13, 2012

NII Holdings (NIHD) in a capitulation sell-off; Netflix (NFLX) poised for another leg higher

A pair of alliterative NASDAQ-100 issues merit scrutiny this evening: the cryptically titled NII Holdings and the trader favorite Netflix.

The indices concluded the session in the unusual way of having their respective daily percentage changes be multiples of each other. The DJIA ended down 0.25%, the S&P slid 0.50%, and – you guessed it – the NASDAQ surrendered 0.75%. Ten year Treasuries declined to fresh record lows.

NIHD, then. The stock is a holding company for Latin American businesses operating under the Nextel (mobile telecommunications) brand. Notably, its chart is forming a stunning capitulation pattern on the daily candles view, as is apparent below.

NIHD, 4 y 1d
Does today’s low represent a buying opportunity? Powerful evidence on the affirmative side is that price action sliced below long-term (11-month) price channel support that was steeply downward sloping -- usually an indicator of capitulation and concomitant contrarian opportunity. Volume was also heavy, although about a half dozen sessions over the past 52 weeks had still greater turnover (and at a significantly higher value per share).

I, for one, am inclined to expect further lows, chiefly because bears squashed a nascent afternoon rally and brought the stock to new intraday lows in the final minutes of trade. Still, today’s accelerated selling suggests a short squeeze will come sooner rather than later.

Onward to Netflix. These pages made a bullish case for the shares ten days ago – and at a price a full 20 percent below today’s levels.

NFLX, 180 d 1h
Despite its recent steep ascent, NFLX looks poised to pop again. Looking at the above hourly candles chart, price action over the past week has generated a bull flag and today edged to a fresh two-month high. Somewhat significantly, the stock also just stepped across the resistance of a six month price channel – although the channel’s slicing through clear air for the last two months renders it less reliable.

Thursday, July 12, 2012

Biogen (BIIB) hints at forthcoming volatility; Ctrip (CTRP) and Ebay (EBAY) approach strong support

Three NASDAQ-100 securities are in the spotlight today, all with interesting price action vis-à-vis their significant price channels.

First though, the broad market traded horizontally for much of the session, with brief volatility occurring only toward the end of trading on a release of Fed minutes. The S&P500 ended unchanged, the NASDAQ slipped 0.5%, and the DJIA gave up 0.4%.

The 2-year chart of Biogen Idec (BIIB), a Massachusetts-based biotech company, paints a decidedly bullish picture. The stock has not dipped below its 200-day simple moving average since July 2010.

BIIB, 4 y 1d (zoomed in)
Two upward-sloping price channels nicely envelop almost all of BIIB’s price action, and over the past few months, the stock has been burrowing into a triangular wedge between the two. This “burrowing” has been marked by a decrease in volatility, and it appears to be a safe bet that volatility will expand as Biogen violates either the yellow resistance line or red support line.

Whereas Biogen enjoys a two-year bull market in its equity, (CTRP), the Shanghai-based travel agency, is decidedly out of favor among investors. The stock is at a 3-year low and approaches support (at about $14.7) from a 4-year price channel.

CTRP, 5 y 1d
On the hourly candles chart, a well-fitting price channel extending to early March likewise suggests support about a dime or quarter below $15.

CTRP, 100 d 1h
Ebay’s charts are subdued compared to the multi-year bull or bear parades of its two NASDAQ brethren. Looking at hourly candles, the last week has seen EBAY break below a trendline that has soldiered on since the market nadir of last Thanksgiving. After a pullback to touch the trendline once more, the stock has subsequently declined and now approaches horizontal support around $38.25.

EBAY, 180 d 1h
On the five minute candles chart, extrapolation of the well-fitting price channel suggests that $38.25 might act as support around the end of tomorrow’s trading or the start of Friday’s.

EBAY, 20 d 5m

Wednesday, July 11, 2012

Dow Jones Industrial Average pulls back to 5-week price channel support; Apple (AAPL) behaves bullishly

A steady selloff from morning highs brought the Dow Jones Industrial Average (DJIA generally; DJX below) to support from a 5-week price channel. Meanwhile Apple shares – being mentioned here due to a reader request – appear as bullish as ever.

As the closing bell rang, the S&P500 settled 0.8% lower. The NASDAQ shed 1.0%, and the DJIA was a relative outperformer with only a 0.7% decline.

The last hour of trading brought the Dow to support from a 5-week, upward sloping price channel. Price temporarily pierced through the support, arriving at the intraday low of 12607, but the hourly bar then rebounded to close at 12653, somewhat above the support line. The intraday low was also notable for being quite close to the 200-period simple moving average using hourly candles, currently at 12583.

DJX, 90 d 1h
Apple shares have trended very bullishly over the past 7 trading sessions after consolidating since approximately mid-April from their late-2011 / early-2012 advance. Thursday of last week saw price action break through the resistance of one upward-sloping price channel (marked in red below; resistance was at about $601), and price continued to appreciate until today encountering resistance from a steeper upward-sloping price channel (marked in yellow below; resistance was at around $620).

Even with today’s modest 0.9% decline, AAPL remains about $27 above its 200-period SMA based on hourly candles, a level of bullish sentiment that, before the past 5 days’ price action, was not encountered since April 13th.

AAPL, 70 d 1h