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S&P 500 climbed 0.3%, and Nasdaq-100 futures jumped 0.7%

Economy

Stock futures climbed on Wednesday, driven by strong performances from Salesforce and Marvell Technology, following upbeat quarterly earnings. Futures tied to the Dow Jones Industrial Average rose by 215 points (0.5%), while S&P 500 futures gained 0.3%, and Nasdaq-100 futures advanced by 0.7%.

Salesforce surged 12% after reporting fiscal third-quarter revenue that exceeded expectations, showcasing robust demand in the enterprise software sector. Meanwhile, chipmaker Marvell jumped 14% after surpassing earnings estimates and providing optimistic fourth-quarter guidance, indicating resilience in the semiconductor industry.

This movement follows a mixed session on Wall Street, where the S&P 500 and Nasdaq closed with small gains, while the Dow dipped slightly. The broader market has experienced a modest start to December, contrasting with November’s robust rally, but analysts anticipate a resurgence in momentum. LPL Financial’s George Smith pointed out that December historically sees strong market performance, particularly in the latter half of the month.

However, economic data introduced some caution. ADP’s report revealed that private payrolls grew by just 146,000 in November, missing estimates of 163,000. This signals potential softness in the labor market, with investors now awaiting Friday’s November jobs report for further clarity.

S&P 500 Index Chart Analysis

Based on the provided stock chart, which appears to be a 15-minute candlestick chart for the S&P 500 Index, here’s a brief analysis:

The chart shows a clear upward trend, with higher highs and higher lows indicating bullish momentum over the analyzed period. The index has steadily climbed from a low of approximately 5,855 to a recent high of 6,053.58, suggesting strong buying interest.

Key resistance is observed near 6,050-6,053 levels, as the price has struggled to break above this zone in the most recent sessions. If the index breaches this level with strong volume, it could lead to further upward movement. Conversely, failure to break out may lead to a pullback, with potential support around the 6,000 psychological level and 5,980, where consolidation occurred previously.

The candlestick patterns show relatively small wicks, indicating limited volatility, which could imply steady market confidence. However, the bullish rally could be overextended, warranting caution for traders, especially if any negative catalysts emerge.

In summary, the short-term trend is bullish, but traders should monitor resistance levels and volume for signs of a breakout or reversal. It’s also essential to watch broader market factors, as indices are often influenced by macroeconomic data and sentiment.

The post S&P 500 climbed 0.3%, and Nasdaq-100 futures jumped 0.7% appeared first on FinanceBrokerage.

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Stocks

Master the MACD Zero Line for a Trading Edge!

Stocks

In this exclusive StockCharts video, Joe shows how to use the MACD zero line as a bias for a stock. As opposed to offering a buy signal, this Zero line level can provide insight into a market or stock’s underlying condition; Joe shows how to refine that information with other indicators. He then covers the shifts that are taking place in the sectors, and finally goes through the symbol requests that came through this week, including DIS, TSLA, and more.

This video was originally published on December 11, 2024. Click this link to watch on StockCharts TV.

Archived videos from Joe are available at this link. Send symbol requests to stocktalk@stockcharts.com; you can also submit a request in the comments section below the video on YouTube. Symbol Requests can be sent in throughout the week prior to the next show.

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Stocks

Small Caps are Set to Skyrocket in 2025—Here’s What You Need to Know

Stocks

With an new administration inbound in Washington, D.C., might now be a good time to jump into small-cap stocks?

If you’ve heard this maxim based on the Presidential Election Cycle Theory, it has some truth to it. Small-caps tend to thrive after presidential elections as attention shifts to domestic issues and governance. Since 1980, the Russell 2000 has averaged a 15% return in post-election years, outperforming large-cap stocks by about 4 percentage points.

Since we’re thinking about seasonality, what about small-cap seasonality on a year-round basis? How do small caps seasonally perform throughout the year, and is it a good time to jump in now?

Let’s get straight to it, starting with a 10-year seasonality chart of iShares Russell 2000 ETF (IWM), our small-cap proxy. If you click on the link above, be sure to toggle the timescale to 10 years (the chart’s default period is 5 years).

FIGURE 1. 10-YEAR SEASONALITY CHART OF IWM. Note that November is IWM’s strongest month. The average higher close rate is the number above the bars, while the average returns are at the bottom of the bars just above the months.Chart source: StockCharts.com. For educational purposes.

Over the last 10 years, November has been IWM’s strongest seasonal month, averaging a 90% higher close rate and a nearly 6% monthly return. While December and January are seasonally tepid, February through July are consistently strong. With 2025 following an election year, investors may find small caps an attractive investment opportunity.

If you want to add the Russell 2000 to your portfolio, you’ll want to fine-tune an entry point. But how? First, examine a weekly chart of IWM to understand the larger context of the index’s current price action.

FIGURE 2. WEEKLY CHART OF IWM. It helps to pay attention to the resistance levels going back to 2020.Chart source: StockCharts.com. For educational purposes.

Look at the two resistance levels marked by the magenta and blue dotted lines. Notice the difficulty IWM experienced breaking above the first level (magenta), at $224, from the end of July to November, forming an ascending triangle. As IWM broke through that contested level, it also broke above the second level of resistance (blue line) and its all-time high at $234.50.

Having pulled back slightly after breaking through two major resistance levels, bulls aiming to add positions are probably looking for a well-timed entry point. Let’s shift to a daily chart.

FIGURE 3. DAILY CHART OF IWM. Keep an eye on the swing lows marked by the blue dashed horizontal lines.Chart source: StockCharts.com. For educational purposes.

First off, IWM’s technicals demonstrate strength, as shown by the StockChartsTechnicalRank (SCTR) line, currently sitting just below the bullish 90-level threshold. However, the two volume-based indicators—Chaikin Money Flow (CMF) and On Balance Volume (OBV)—show a stark divergence. This can indicate, among other things, that selling pressure is prominent on the institutional side, while retail investors are driving up buying pressure (institutional players have the upper hand in most cases).

As IWM’s price pulls back, be mindful of the swing lows, each marked by a blue dotted line in the chart. Though you can expect those levels to serve as support, I’d be wary if the price closes below $215. Not only would that invalidate the near-term uptrend (no longer seeing higher highs and higher lows), but it would also fall into a range muddled with historical congestion (as seen in the weekly chart).

If IWM bounces above $226 or $215, look at the volume-based indicators to see if buying pressure on both indicates bullish alignment. Direction in volume often precedes price, so keep an eye on each. Hopefully, a strong bounce on high volume will mark a well-timed entry into the index ETF.

At the Close

Small-cap stocks have a history of shining in post-election years and thriving in specific seasonal windows, like November and the spring months. But timing is everything, so add this chart to your ChartList and watch the levels and indicators discussed above. Should conditions shift favorably, you can decide whether it’s the right time to pull the trigger.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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Investing

Additional High Priority Antimony Targets Identified over 10km Corridor at Yallalong Project

Investing

Octava Minerals Limited (ASX:OCT) (“Octava” or the “Company”), a Western Australia focused explorer of the new energy metals antimony, REE’s, Lithium and gold, is pleased to report that detailed geophysics over the 10km antimony corridor at Yallalong is now complete and final data has been processed and interpreted.

Highlights

  • Ground geophysical survey over the identified 10km antimony corridor at Yallalong is complete and final data has been processed and interpreted.
  • Detailed interpretation of the geophysical data integrated with previous drilling data significantly expands the scale of the exploration model for high-grade antimony mineralisation at Yallalong.
  • 14 new, high priority, structural targets analogous to the high-grade Discovery Target have been identified and will be evaluated in the next drilling campaign.

The geophysics has identified 14 new structural antimony targets at Yallalong analogous to the Discovery Target, where historic drilling intercepted high-grade antimony.

Octava’s Managing Director Bevan Wakelam stated, ‘The new gravity data redefines the exploration model for high grade antimony at Yallalong. It explains the presence of anomalous antimony along the structural corridor and predicts potential hot spots along it. It is exciting to consider the possibility of a continuous system extending under cover for more than 10 kilometers and having a method to pinpoint the most prospective zones. Planning work is already underway for drilling of these new targets ‘

Antimony

The Yallalong project is located ~ 220km to the northeast of the port town of Geraldton in Western Australia. The antimony (Sb) mineralisation identified at Yallalong appears within a 10km north- south striking mineralised corridor.

Previous exploration identified four principal antimony targets where antimony mineralisation was exposed at surface. Only the Discovery Prospect had previous drilling and recorded high-grade antimony intercepts over a strike length of ~300m, including 7m @ 3.27% Sb.

A detailed geophysical survey was undertaken to identify underlying structures, such as shears and faults, which act as conduits to mineralising fluids. It also outlines key lithological boundaries. These factors are important in the formation of antimony deposits worldwide.

Interpretation of the geophysical data and the historic drilling has re-defined the exploration model for high grade antimony at Yallalong. Fourteen new targets analogous to the Discovery Target have been identified and will be evaluated through planned drilling. See Figure 1.

Atlas Geophysics conducted the gravity survey using a 100m x 100m grid pattern, with additional measurements on a 50m x 50m grid over the Discovery Target. NewGen Geo, a geophysical consultancy, carried out the gravity data processing and interpretation.

Click here for the full ASX Release

This post appeared first on investingnews.com

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Investing

Hempalta

Investing

Overview

Hempalta Corp. (TSXV:HEMP) is engaged in processing industrial hemp at scale to produce a range of consumer and commercial products. Its proprietary processing technology, HempTrain, is capable of converting industrial hemp into high-volume, high-grade products. The company’s product range includes animal bedding, garden mulch and construction products such as hempcrete – a biocomposite material for construction and insulation made of hemp hurds and lime. Industrial hemp is highly versatile and can be grown in a variety of climates and soil conditions.

Perhaps the most important characteristic of industrial hemp is its ability to capture carbon dioxide in the atmosphere. One hectare of a hemp crop can absorb 10 to 22 tons of CO2 and is believed to be more efficient at carbon sequestration than forests. HEMPALTA is leveraging this hemp attribute as a new revenue stream and an opportunity to participate in the fast-growing carbon market, enabled by its acquisition of a controlling interest in UK-based Hemp Carbon Standard (HCS).

HEMPALTA owns 50.1 percent of HCS, which uses a science-based quantification methodology designed to measure carbon removal from industrial hemp accurately. The strategic investment in HCS – and through partnerships with industrial hemp farmers – positions HEMPALTA to become a leading carbon credit generator. The sale of these hemp-derived carbon credits offers a new revenue stream for HEMPALTA, in addition to its B2C and B2B hemp products. The carbon credit market is currently the largest opportunity for HEMPALTA. The global voluntary carbon market is projected to reach $2.68 trillion by 2028 at a CAGR of 18.23 percent. HEMPALTA anticipates realizing the first full cycle of carbon credit revenue by the first quarter of 2025.

The other key revenue stream for the company is from the sale of hemp products. Here again, the opportunity is large, with the global industrial hemp market projected to reach $16.75 billion by 2030. The company plans to introduce new products and expand its existing capacity to capitalize on this growing opportunity. Its plant expansion initiatives are focused on boosting capacity to effectively meet the increasing market demand. The change in the US Residential Building Code, approving the use of hemp-lime (Hempcrete), is a major tailwind. Hempcrete can now be used in one and two-family dwellings and townhouses in 49 of 50 US states. The company intends to focus on this product in its near-term strategy.

The company is led by seasoned and tested industry veterans with significant experience scaling businesses. The CEO, Darren Bondar, has a proven track record of scaling businesses and exiting them. He founded and built Canada’s largest recreational cannabis store network, Spiritleaf, and sold it for $131 million.

Company Highlights

  • HEMPALTA is an agricultural technology company processing industrial hemp at scale. Industrial hemp is known for its sustainability, given its ability to absorb carbon dioxide (CO2) twice as efficiently as forests.
  • HEMPALTA employs a proprietary processing technology called HempTrain to process industrial hemp to produce a range of high-value, environmentally friendly consumer and commercial products. These include biocomposite building materials, food preservation pads, pet litter, animal bedding and gardening products.
  • The company’s consumer products are currently sold and distributed in over 150 stores and through e-commerce platforms in Canada and the U.S., with the goal of reaching more than 1,500 retail channels.
  • In addition to industrial hemp products, HEMPALTA also offers carbon credits. The global voluntary carbon market is projected to reach $2.68 trillion by 2028, presenting a large opportunity for the company.
  • The company owns a controlling interest (50.1 percent) of Hemp Carbon Standard (HCS), which is driving HEMPALTA’s venture into the carbon credits market. HCS uses a science-based quantification methodology designed to measure carbon removal from industrial hemp accurately.
  • The industrial hemp industry is projected to experience growth as consumers and companies seek environmental and sustainable products. The global industrial hemp market is expected to reach $16.75 billion by 2030.

Key Segments

Carbon Credits

HEMPALTA is providing carbon credit solutions utilizing the carbon-negative nature of industrial hemp agriculture. The company partners with farmers to grow industrial hemp, which can absorb between 10 to 22 tons of CO2 per hectare. The ability of industrial hemp to absorb CO2 allows for the creation and sale of carbon credits on the voluntary market. Carbon credits can be purchased by companies looking to offset their emissions. This creates a revenue stream for HEMPALTA.

Once the farmers harvest hemp, the amount of CO2 absorbed by the crop is measured and verified using HCS’s technology. This step is crucial to accurately quantifying the carbon sequestration and determining the corresponding carbon credits.

HEMPALTA owns a controlling interest (50.1 percent) in HCS, which is a major advantage as it allows HEMPALTA to measure, report and verify the carbon credits. HCS is the only company in the world that can scientifically quantify and measure CO2 removal for hemp. HCS’s technology allows accurate measurement of CO2 sequestration in the biomass of the industrial hemp and related soil. HCS’s reporting ensures transparency and accuracy, thereby providing a solid basis for corporate buyers to make carbon credit purchases. The company estimates its partnership with HCS could result in over 1 million acres being measured, reported and verified for the creation of carbon credits that can be sold on the voluntary carbon credit market.

Industrial Hemp Products

HEMPALTA uses state-of-the-art processing technology, called the HempTrain, to produce a range of high-value, environmentally friendly consumer and commercial products using industrial hemp. These include biocomposite building materials, food preservation pads, pet litter, animal bedding and gardening products. These products are currently sold and distributed via offline and online channels. The products are present in more than 150 retail stores in Canada and the US, along with major e-commerce platforms. The goal is to reach over 1,500 retail channels.

Management Team

Darren Bondar – President and CEO

Darren Bondar previously founded and served as president and CEO of Inner Spirit Holdings, the first cannabis retail company listed on the Canadian Securities Exchange. Under his leadership, Inner Spirit expanded significantly until its acquisition by Sundial Growers in July 2021. Prior to that, he was the president and CEO of Watch It! and Comfortable Image, consumer retail and franchising businesses. Bondar holds a Master of Business Administration degree from the University of Alberta and a Bachelor of Arts degree from Western University. He has completed the financing, governance and compliance for public companies course at Simon Fraser University.

Candace Ryan – Chief Financial Officer

Candace Ryan brings over 15 years of experience in accounting, payroll, human resources, financial planning, and financial reporting and analysis. Previously, she served as financial controller for Spiritleaf, a subsidiary of Inner Spirit Holdings, listed on the Canadian Securities Exchange.

Adrian Stokes – Director

Adrian Stokes has over two decades of experience in financial services. He currently leads ADL Private Office in Monaco, a private family office for the majority partner of Fullbrook Thorpe Investments LLP. Previously, he held various roles at Barclays Wealth & Investment Management. He holds a double major in business from Greenwich Business School in London.

Craig Steinberg – Director

Craig Steinberg has been a director of HEMPALTA since August 2021. He is a practicing lawyer with Steinberg Law and is the designated mortgage broker for Fortius Mortgage Corporation. From August 2017 until July 2021, Steinberg served as a director of Inner Spirit Holdings which was listed on the Canadian Securities Exchange.

Dan Balaban – Director

Dan Balaban is the executive chair and CEO of Greengate Power Corporation, a Canadian renewable energy company. Before joining Greengate, Balaban co-founded and served as president and CEO of Roughneck.ca, which provides software solutions for the oil and gas industry. Earlier in his career, he worked as a management consultant at top-tier firms, including EY and PwC.

Liam Russell Wilson – Director

Liam Russell Wilson is the vice-president of business development with Prairie Merchant Corporation, a private investment company that focuses on real estate, energy, agriculture and sports franchises. He sits on the board of Indiva and continues to actively manage a portfolio of cannabis-related investments. Wilson holds a Master of Business degree from Queensland University of Technology.

Michael Ginevsky – Corporate Secretary

Michael Ginevsrky is a partner at DS Lawyers Canada LLP, where he focuses primarily on capital markets, mergers and acquisitions, corporate governance, and securities regulatory compliance. Ginevsky received a Bachelor of Commerce degree from the University of British Columbia and Juris Doctor from the University of Alberta. He was previously corporate secretary of Inner Spirit Holdings, a cannabis retailer listed on the CSE.

This post appeared first on investingnews.com

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Economy

Stock Futures Lower after S&P 500 futures ticked down 0.18%

Economy

Stock futures are trading slightly lower Monday morning as investors gear up for the final month of 2024. S&P 500 futures slipped 0.18%, alongside declines in Dow Jones Industrial Average futures and Nasdaq 100 futures, which dropped 0.13% and 0.17%, respectively. The market’s focus is shifting to upcoming economic data, particularly reports on manufacturing and construction spending, ahead of this week’s key labor data releases.

November was a standout month for equities, with the S&P 500 futures rallying to reflect the index’s best monthly performance of the year. Both the S&P 500 and Dow Jones Industrial Average achieved all-time highs during Friday’s shortened trading session, with the Dow briefly surpassing 45,000. Small-cap stocks also saw robust gains, with the Russell 2000 index surging over 10% in November, buoyed by optimism around potential tax cuts.

As trading kicks off in December, investors are keeping a close eye on geopolitical developments in Europe, where France’s CAC 40 index dropped 0.77% amid political concerns, while Germany’s DAX and the U.K.’s FTSE 100 showed smaller declines.

S&P 500 futures will likely continue to act as a key barometer for market sentiment, particularly as traders assess the impact of upcoming economic data and global market developments.

S&P 500 Index Chart Analysis

This 15-minute chart of the S&P 500 Index shows a recent trend where the index attempted to break above the resistance level near 6,044.17 but retraced slightly to close at 6,032.39, reflecting a minor decline of 0.03% in the session. The candlestick pattern indicates some indecisiveness after a steady upward momentum seen earlier in the day.

On the RSI (Relative Strength Index) indicator, the value sits at 62.07, having declined from the overbought zone above 70 earlier. This suggests that the bullish momentum might be cooling off, and traders could anticipate a short-term consolidation or slight pullback. However, with RSI above 50, the overall trend remains positive, favoring buyers.

The index’s recent low of 5,944.36 marks a key support level, while the high at 6,044.17 could act as resistance. If the price sustains above the 6,020 level and RSI stabilizes without breaking below 50, the index could attempt another rally. Conversely, a drop below 6,020 could indicate a bearish shift.

In conclusion, the index displays potential for continued gains, but traders should watch RSI levels and price action near the support and resistance zones for confirmation.

The post Stock Futures Lower after S&P 500 futures ticked down 0.18% appeared first on FinanceBrokerage.

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Economy

S&P 500 climbed 0.3%, and Nasdaq-100 futures jumped 0.7%

Economy

Stock futures climbed on Wednesday, driven by strong performances from Salesforce and Marvell Technology, following upbeat quarterly earnings. Futures tied to the Dow Jones Industrial Average rose by 215 points (0.5%), while S&P 500 futures gained 0.3%, and Nasdaq-100 futures advanced by 0.7%.

Salesforce surged 12% after reporting fiscal third-quarter revenue that exceeded expectations, showcasing robust demand in the enterprise software sector. Meanwhile, chipmaker Marvell jumped 14% after surpassing earnings estimates and providing optimistic fourth-quarter guidance, indicating resilience in the semiconductor industry.

This movement follows a mixed session on Wall Street, where the S&P 500 and Nasdaq closed with small gains, while the Dow dipped slightly. The broader market has experienced a modest start to December, contrasting with November’s robust rally, but analysts anticipate a resurgence in momentum. LPL Financial’s George Smith pointed out that December historically sees strong market performance, particularly in the latter half of the month.

However, economic data introduced some caution. ADP’s report revealed that private payrolls grew by just 146,000 in November, missing estimates of 163,000. This signals potential softness in the labor market, with investors now awaiting Friday’s November jobs report for further clarity.

S&P 500 Index Chart Analysis

Based on the provided stock chart, which appears to be a 15-minute candlestick chart for the S&P 500 Index, here’s a brief analysis:

The chart shows a clear upward trend, with higher highs and higher lows indicating bullish momentum over the analyzed period. The index has steadily climbed from a low of approximately 5,855 to a recent high of 6,053.58, suggesting strong buying interest.

Key resistance is observed near 6,050-6,053 levels, as the price has struggled to break above this zone in the most recent sessions. If the index breaches this level with strong volume, it could lead to further upward movement. Conversely, failure to break out may lead to a pullback, with potential support around the 6,000 psychological level and 5,980, where consolidation occurred previously.

The candlestick patterns show relatively small wicks, indicating limited volatility, which could imply steady market confidence. However, the bullish rally could be overextended, warranting caution for traders, especially if any negative catalysts emerge.

In summary, the short-term trend is bullish, but traders should monitor resistance levels and volume for signs of a breakout or reversal. It’s also essential to watch broader market factors, as indices are often influenced by macroeconomic data and sentiment.

The post S&P 500 climbed 0.3%, and Nasdaq-100 futures jumped 0.7% appeared first on FinanceBrokerage.

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Stocks

How to Spot Low-Volatility Stocks That are Ready to Explode

Stocks

As the year winds down, investors are beginning to position their portfolios for the New Year. I’m considering it, and perhaps you are too.

Next year, in addition to the seasonal rotations among sectors, we have a plot twist: a new administration in D.C. likely to bring disruptive policy changes affecting the market.

The Financials sector is expected to perform well under the new administration. If that’s the case, it’s worth taking a closer look at this sector and identify which stocks to watch for potential buy opportunities. If you’re already considering financial stocks and looking to fine-tune an entry before year-end, then consider those that have pulled back or are trading in a tight, low-volatility consolidation range—prime candidates for a potential bounce.

How can you spot these opportunities? One way is to use MarketCarpets’ Bollinger Band Width setting.

On Monday, I used this tool with the Latest Value setting, which provides a score between 0 to 100. The closer to zero, the narrower the BandWidth. The narrower the BandWidth, the greater the likelihood of spotting a “squeeze” leading to a significant price move or a breakout.

FIGURE 1. MARKETCARPETS BOLLINGER BAND WIDTH SET TO LATEST VALUE. It won’t be surprising if most of the big stocks on the list with the lowest value exhibit similar patterns.Image source: StockCharts.com. For educational purposes.

If you look at the table on the right, you’ll see that the three biggest stocks with the lowest chart values are Visa (V), Mastercard (MA), and Berkshire Hathaway B shares (BRK/B). If you were to continue scrolling, the three big banks with the narrowest Bollinger Bandwidths are Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), and JP Morgan Chase (JPM). For many investors, some of these shares are quite expensive. So, let’s consider that and focus on the stocks that are more relatively affordable to most readers: BAC, MS, and JPM.

Before diving into these stocks, let’s examine the sector’s breadth using a daily chart of the S&P FInancial Bullish Percent Index ($BPFINA). We’ll also compare the relative performance of the Invesco KBW Bank ETF (KBWB) as a proxy for the large U.S. banking industry against the Financial Select Sector SPDR (XLF), which represents the broader financials sector.

Sector Breadth and Relative Performance of Banks vs. Sector

The $BPFINA shows the percentage of stocks signaling Point & Figure “buy” signals. Right now, 91% of S&P financial stocks are flashing buy signals (see below).

FIGURE 1. FINANCIAL SECTOR BULLISH PERCENT INDEX. The Financial sector is bullish but potentially oversold.Chart source: StockCharts.com. For educational purposes.

While a BPI figure above 50% is bullish, above 70% signals that the sector is potentially overbought. On an industry level, the banking industry is outperforming broader financials by 11% and rising.

Bank of America

Let’s get to the stocks, starting with a daily chart of BAC.

FIGURE 2. DAILY CHART OF BANK OF AMERICA. Is the stock poised for a big move up or down?Chart source: StockCharts.com. For educational purposes.

There’s a lot here, so I’ll bullet the key points:

  • BAC’s technical strength, as measured by the StockChartsTechnical Rank (SCTR) is slightly declining, but at a level just below 70, it signals only slight weakness.
  • The Bollinger BandWidth has decreased significantly, and BAC’s price is above the lower band. This doesn’t signify a squeeze as much as a low volatility pullback. But what are the chances that BAC is likely to decline further?
  • On a relative performance scale, BAC is slightly underperforming its industry, down barely 2%.
  • In terms of momentum, there’s a divergence between indicators: On Balance Volume (OBV) suggests high buying pressure, possibly driven by retail investors, while Chaikin Money Flow (CMF) indicates strong selling pressure, likely reflecting institutional activity.

BAC is one of the largest US banks, so I’d add it to my ChartList as a possible prospect for a longer-term investment. However, given the mixed technical signals, I consider this a wait-and-see moment, observing how price reacts at current levels and whether the OBV and CMF can align if BAC continues its move to the upside.

How does BAC compare with Morgan Stanley?

Morgan Stanley

Let’s take a look at a daily chart.

FIGURE 3. DAILY CHART OF MS. The stock’s performance, as measured by SCTR, is performing slightly better than BAC.Chart source: StockCharts.com. For educational purposes.

  • MS’s SCTR score, at 83, is stronger than BAC’s and close to the 90 level, which might be considered exceedingly bullish.
  • As its Bollinger BandWidth narrows, the stock has also fallen below support, coming out of a rounding top, and looking to fill the wide gap made at the beginning of November.
  • MS is slightly outperforming its industry peers by slightly over 3%, better than BAC’s relative performance.
  • Selling pressure, however, is strong, and the OBV and CMF appear to align.

This appears to be a classic pullback scenario. I would add this to my ChartList, as MS is one of the biggest players in the industry, but I’d wait for a bounce and monitor a bullish reversal in both the OBV and CMF before considering a long position.

JP Morgan Chase

Finally, let’s look at the last big bank on my list: JP Morgan Chase. Below is a daily chart.

FIGURE 4. DAILY CHART OF JPM. The divergence in the OBV and CMF is something to watch carefully.Chart source: StockCharts.com. For educational purposes.

  • JPM’s SCTR score of 76 is declining, yet still relatively bullish.
  • Its Bollinger BandWidth indication is similar to the two we just viewed. In JPM’s case, traders seem hesitant to commit to any direction as price settles right below the middle band. It’s as if they’re waiting for some indication to trigger movement in one direction or another.
  • Regarding relative performance, JPM is barely outperforming its industry peers, by a little over 1%.
  • Similar to the BAC example, there appears to be a potential, yet prominent divergence between retail buying and institutional selling, as the OBV has been climbing while the CMF has been steadily declining.

JPM is sitting in a near-term holding pattern. It’s going to break eventually. But for now, the market appears unable to commit to a given direction, and the mixed momentum signals seem to support this view. It’s best to monitor this on my ChartList and wait for stronger bullish signals and a definitive reversal to the upside before jumping in. In short, patience.

At the Close

Planning the coming year, I focused on a given sector (Financials) and used MarketCarpets’ Bollinger BandWidth setting to identify stocks with tight, low-volatility setups that might signal a breakout opportunity. This led me to BAC, MS, and JPM. While these stocks remain on my ChartList as longer-term prospects, I’m opting for a wait-and-see approach. Fine-tuning an entry is important. And while there are many ways you can do this, I just showed you one approach that might just come in handy given the right circumstances.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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Stocks

Stock Market Sells Off Ahead of CPI: Charts You Should Be Watching

Stocks

The Tuesday afternoon selloff brings the broader indexes close to key support levels. In the first half of the trading day, the S&P 500 ($SPX) and Dow Jones Industrial Average ($INDU) were trading slightly higher. The Nasdaq Composite ($COMPQ) was the leader in the morning hours. But towards the last couple hours of the trading day, all three indexes sold off.

The bigger question is how much damage two down days in a row caused. With the broader stock market indexes rising to new highs, seeing two down days in a row is a bit disappointing. But a selloff is healthy, especially as we approach the end of the year, as long as the bullish trend is still intact.

The chart of the S&P 500 and Nasdaq Composite below shows that both indexes have an upward trending 21-day exponential moving average (EMA). However, the S&P 500 is getting close to its November high, which is a valid support level. The Nasdaq has a ways to go before it reaches its November high. A closer support level is a low of the December 4 price move, a gap up.

FIGURE 1. S&P 500 AND NASDAQ COMPOSITE SELL OFF. Although the bullish trend is still in play, watch the support levels and moving average convergence/divergence (MACD) for signs of a downtrend.Chart source: StockChartsACP. For educational purposes.

The moving average convergence/divergence (MACD) in the lower panel shows that the S&P 500 is the weaker of the two indexes, technically speaking. Since October, the MACD has been relatively flat while the S&P 500 was rising. The MACD for the Nasdaq was in a slight incline while the index was rising.

The good news is that the seasonally strong part of the month is yet to come. December and January tend to do well with the Santa Claus rally, the January Effect, and the January Barometer, three seasonal patterns discussed in the Stock Trader’s Almanac. The Cboe Volatility Index ($VIX) remains low, which is another variable that supports the bullish move in equities. We should get more clarity on Wednesday after the November CPI data is released.

Precious Metals Rise

While equities were selling off, gold and silver prices started inching higher. The surge in gold prices can be attributed to China’s central bank deciding to buy gold, something it hasn’t done in several years.

Gold prices pulled back to the 100-day SMA after reaching an all-time high at the end of October. Since then, it has been trending higher and could make another attempt to reach its high (see chart of gold continuous contract below).

FIGURE 2. GOLD FUTURES TRYING TO BREAK OUT OF A RESISTANCE LEVEL. If gold prices break above the resistance level, price could make an attempt to reach its all-time high.Chart source: StockCharts.com. For educational purposes.

Tuesday’s low coincided with the 50-day SMA, and the high coincided with previous highs. You could say that $GOLD traded between a support and resistance level. A successful break above Tuesday’s high would confirm that gold prices could aim to reach an all-time high.

A few geopolitical events surfaced this week that may have contributed to the rise in crude oil prices, which saw Treasury yields rise slightly. But these could be short-lived news-driven reactions.

NVIDIA’s Slide

One stock I’ll be closely watching is NVIDIA Corp. (NVDA). The Chinese government is investigating the company for antitrust activities. NVDA closed below its 50-day SMA on Tuesday with a declining StockCharts Technical Rank (SCTR) score of 50.20. The MACD is also indicating slowing momentum (see chart below).

FIGURE 3. NVIDIA’S STOCK PRICE FALLS BELOW 50-DAY MOVING AVERAGE. In addition, the SCTR score is at 50, which indicates weak technical strength. The MACD shows momentum is declining.Chart source: StockCharts.com. For educational purposes.

A further decline in NVDA’s stock price, which makes up about 7% of the S&P 500, could lower the index’s value.

The bottom line: November CPI will be released on Wednesday morning, 8:30 AM ET. Economists estimate a 2.7% year-over-year increase while the core CPI is expected to rise 3.3%. This would dictate Wednesday’s price action.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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