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

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