Wednesday, August 22, 2012


Volatility registered a definite uptick in today's New York trading, with the S&P500 touching a fresh 4-year high (surpassing the previous high-water mark of 1422, set on April 2 of this year, by four points) before selling-off into the close.

This evening's chart wrap-up focuses on five different equities: NASDAQ-100 components CTRP, EXPD, GMCR and SYMC, and S&P-100 component LMT. International (CTRP), a Chinese travel agency, has been in a lengthy bear market. The hourly-candles chart, stretching back to December 2011, shows a painful halving of the stock price; moreover, the bear market extends back to late 2010, when CTRP was a fifty dollar stock. The past month has seen a strengthening rally, with waves of buying reaching ever higher and volume growing on the advances. The buying may continue to the six-month price channel boundary, presently about a dime below $16. A break above is likely to portend continuation still higher. The truculent bear should review the last several weeks of First Solar (FSLR) price action.

CTRP. Dec 2, 2011 to present. Hourly candles.
Expeditors International (EXPD) is likewise looking up. Price action has just broken through a six-month price channel, having surpassed the 200-period simple moving average (based on hourly candles) about a week ago.

EXPD. Dec 2, 2011 to present. Hourly candles.
Green Mountain Coffee Roasters (GMCR), another FSLR-like day-trading vehicle, is continuing its own post-earnings rally. Resistance from a 6-month price channel is likely to provide a pause; it's only about three percent above today's closing price.

GMCR. Dec 2, 2011 to present. Hourly candles.
Symantec Corp (SYMC) is likewise interacting with a significant price channel -- in this case, with a 15-month variety. Price has consolidated just underneath for the past three sessions, showing that the bulls are still in firm control. A break higher is more likely than it appeared late last week.

SYMC. Aug 2008 to present. Daily candles.
Lockheed Martin (LMT), the defense contractor, may be in a capitulatory rally; bulls should take note and consider hedging. On the hourly-candles chart, price action has vaulted the equity right to the resistance end of an exceptionally well-formed 3-month price channel; volatility has contracted, suggesting a regression to the mean is overdue (and volatility expansion almost invariably brings lower prices). This over-bought sentiment is confirmed on the daily-candles chart, where price is precisely at 3.5-year price channel resistance, albeit vis-a-vis a channel that is only modestly well-formed.

LMT. May 23, 2012 to present. Hourly candles.
LMT. Aug 2008 to present. Daily candles.