Baidu (BIDU) rallies from 2-year channel support

NOV25 0901PST. The ADRs of the Chinese search engine Baidu (BIDU) bounced on Friday (23 Nov) from the support of a nicely-defined 2-year price channel, shown below in dashed red. The rally has come after a November of intense selling pressure, and last week's nadir saw the stock at a more depressed level relative to its 200-day simple moving average (SMA) than has been seen in the last two years (as shown by the oscillator below the price graph).

BIDU. Nov 2010 to present. Daily candles.

The above daily candles chart also shows the security interacting with a more complex collection of three parallel 2-year trendlines, shown in dashed yellow.

Meanwhile, the hourly candles chart of BIDU, reproduced below, demonstrates that the current rally enjoys price channel support from an 8-month channel (shown in dashed red) and a 3-month channel (shown in dashed yellow). At last week's price minimum near $90, the oscillator measuring difference between price and the 200-hour SMA was likewise near its global low (over the chart's timeframe).

BIDU. March 12, 2012 to present. Hourly candles.

Silver (SI) rally powers onward

NOV23 0900PST. November's rally in precious metals, among them silver futures (SI), is witnessing another leg upward in today's trade. The contract is presently at 2-month price channel resistance, with the channel marked below in dashed red.

Of note: the red dashed channel is not particularly robust, being both rather minimally defined and with long stretches through "empty space." As such, price's current pause at the channel may be temporary; bullish sentiment may propel price higher, as it did earlier this week, when price broke through another 2-month price channel, marked below as a lightly dashed, grey line. Incidentally, the break of the grey channel provided an excellent buy point from which to partake in today's rally.

SI. Aug 27, 2012 to present. Hourly candles.

Note: equities traders can reflect their outlook on silver futures by taking a position in the SLV exchange-traded fund, formally titled the iShares Silver Trust.

Russell 2000 index (RUT) finds horizontal support

NOV16 1033PST.  The Russell 2000 index (RUT), along with the other principal equities indices, is enjoying a midday bounce of some 1 percent from intra-day lows.

The charting story here is that the RUT bounce has come from the well-defined horizontal support level of approximately 764-765, which was the index's local minimum on three separate occasions this summer: June 28, July 24, and August 2.

RUT. May 23, 2012 to present. Hourly candles.

Also noteworthy: the Russell 2000 is below its extended 2-month price channel (shown in red above), from which the index emphatically broke on Nov 14. On any forthcoming rally, the RUT is likely to encounter intra-day resistance upon reaching this channel; currently, that would suggest resistance in the neighborhood of 785.

Soybean futures (ZS) approach a buy point

NOV16 0911PST. Soybean futures (ZS) were the Wunderkind of the summer, rallying well over 40 percent between January 1st and the summer's drought-scorched height, but since topping off at $1789 in early September, the contract has given back about 23 percent.

ZS. Aug 26, 2012 to present. 4-hour candles.

The above chart depicts the past two months' decline, and a price channel nicely encapsulates nearly all the price action. Of note: today's two percent dip has brought ZS within a whisker of channel support, which might be expected in the $1360-1370 range.

NB: Equities traders can easily take bullish or bearish bets on soybeans through the SOYB exchange traded fund (whose formal title is: the Teucrium Soybean Fund ETF).

Bristol-Myers Squibb (BMY) sells off to channel support

NOV15 2025PST. Shares of Bristol-Myers Squibb (BMY) have today declined to an appealing buy-point: the support of a precisely-fitting, 3-year price channel. The channel, drawn on the chart below with a dashed red line, is defined by four price extremes, which are highlighted in solid yellow.

BMY. November 2008 to present. Daily candles.

The lower portion of the screenshot shows an oscillator that is defined as the difference between price and its 100-day simple moving average. (The latter is drawn on the chart as a dashed blue line.) As such, the oscillator can be interpreted as an indicator of market sentiment. The current value of the oscillator, -2.45 (i.e. price is $2.45 below the 100-day SMA), is the lowest value since March 2009, suggesting that the stock is oversold.

Markets accelerate downward but the VIX volatility index lags

NOV14 1856PST. Markets declined briskly today, continuing in earnest a bearish move that began with President Obama's re-election last week. Two intriguing details:

1) The last week's downward "price velocity" -- the rate of price decline -- has been increasing relative to the past month of selling. As evidence of this, consider the hourly-candles chart of the NASDAQ Composite (COMP).

Price declines since late September have been contained by a well-fitting price channel, marked below in dashed yellow. In the last week, however, price action has been compressing ever closer to the channel's bottom support line and, in today's trade, has emphatically broken through.

COMP. March 1, 2012 to present. Hourly candles.

 2) Despite the markets' recording of fresh lows on increasingly bearish price velocity, the markets' principal measures of volatility are notably not at fresh 30-day highs. The volatility indices like the VIX (the CBOE volatility index based on options pricing for stocks of the S&P500 index) are, in the parlance of technical analysts, not "confirming" the indices' sharp moves lower, which somewhat increases the probability of a bullish reversal of the indices from present lows.

The hourly-candles chart of the VIX is below. The circled local maxima correspond to the circled price action events on the NASDAQ Composite (COMP) chart above. As the viewer can herself see, today's move by the COMP to fresh 3-month lows has not been matched by a corresponding rise in the VIX to a new 3-month high.

VIX. March 1, 2012 to present. Hourly candles.

JC Penney (JCP) dives toward channel support

NOV13 0932PST. When the Financial Times carries a story with the following tantalizing statistic -- that JC Penney (JCP) has a short interest level at 40% of the firm's outstanding shares, ranking it the second most shorted stock in the S&P500 -- there is surely a contrarian trade in the making.

JCP shares are in a very steep capitulatory sell-off; blood flows in the streets. More to the point, the shares are approaching support from a two-year price channel, which predicts support in the $17.4 area. If taking into account a two-day island reversal from August 2011, which briefly penetrated the channel's lower support line, support might be expected at the lower price of approximately $16.3.

The four-year chart of JCP follows.

JCP. Nov 2008 to present. Daily candles.

Facebook (FB) approaches robust channel support

NOV09 1201PST. Facebook (FB) shares are approaching support from a pair of well-fitting price channels. These forecast support at approximately $19.20, if reached today or near the open of Monday's trade.

The first channel encompasses all price action from June 5 through Oct 23, after which FB shares shot up on a well-received earnings report. This channel, in red below, is well-fitting; local minima coincide with the channel four times, and local maxima on two additional occasions.

The second channel, in yellow below, is defined by four local extrema. It contains all price action from Sept 5 through the present.

The chart itself depicts FB's entire trading history as a public company, i.e. all price action since the company's market debut on May 18, 2012.

FB. May 18, 2012 to present. Hourly candles.

Apple (AAPL) rallies this morning

NOV09 0733PST. A follow-up to this morning's post on Apple (AAPL). The security has broken through the resistance at $540 described earlier, and it is now consolidating underneath resistance at $547 from another 3-day channel.

Given today's strong rally thus far, the $547 resistance may be quick to break. In such an event, the next forecast resistance is at approximately $556-557 -- the bottom of the three-week price channel mentioned in today's earlier post.

AAPL. Past 3 days. 1-minute candles.

Apple (AAPL) may be bottoming

NOV09 0708PST. The five-minute candles chart of Apple (AAPL), showing price over approximately the past month, shows a capitulatory steepening of price action, which is often a precursor of a bottom and sometimes of a "V-shaped" recovery, to use that favorite term of recent political campaigns.

Two noteworthy points: First, price proceeded over most of the time period in a moderately-sloped sell-off, although it began to distance itself from the upper channel line over time.

Second, price violated the first channel's lower boundary and formed a new, steeper channel. And it's now hugging the upper boundary of that second channel.

AAPL. Oct 12 to present. 5-minute candles.

QQQ (Nasdaq ETF) at 2-month channel support

NOV08 1039PST. Most indices, index ETFs, and financial futures are presently at or near significant channel support areas. After Barack Obama's re-election on Tuesday night, the markets have of course been selling off hard, and the present area might mark a low.

Below is a chart of the Powershares QQQ Trust (QQQ), i.e. the largest exchange-traded fund tracking the Nasdaq-100. A well-fitted, downward-sloping price channel encompasses all price action from September 17 to the present, save for an island-reversal day on Sept 26th.

Critically, price is currently right at channel support. Negative sentiment could always propel price lower still, setting up a relatively rare capitulation; that said, buyers do have a reason to step in here.

QQQ. Sept 17 to present. Hourly candles.

Apple (AAPL) approaches 4-year channel support

NOV07 0917PST. Apple is approaching support from a 4-year channel.  The channel is defined by four price action local extrema, circled in yellow. Only three touches would be enough to define a channel -- two points to form one line, and one additional point to define the second, parallel line -- and the fact that a fourth local extreme perfectly touches the channel adds evidence to its explanatory potential.

In zooming into the chart, the 4-year channel would be expected to today support AAPL near $549. In tomorrow's trade, the support would occur around $550.

AAPL. Nov 2008 to present. Daily candles.