3 Big Stock Charts for Friday: Tesla Motors Inc (TSLA), Expedia Inc (EXPE) and iPath S&P 500 VIX Short Term Futures TM ETN (VXX)

Advertisement

The Dow Jones Industrial Average closed below the 17,000 level on Thursday after investors greeted an aggressive expansion of monetary policy stimulus by the European Central Bank with an indifferent yawn.

3 Big Stock Charts for Friday: Tesla Motors Inc (TSLA), Expedia Inc (EXPE) and iPath S&P 500 VIX Short Term Futures TM ETN (VXX)Despite an interest rate cut, and expansion of its bond buying program, a broadening of purchases to include non-bank investment-grade bonds, and the unveiling of a new four-year bond loan program, the ECB’s actions didn’t have the desired impact on confidence.

Instead, off-the-cuff remarks from ECB chief Mario Draghi about the unlikelihood of further rate cuts fueled ongoing fears about the efficacy of limitations of cheap money stimulus.

With the Dow Jones unable to push past the 17,000 level — as it hits downtrend resistance from its two-year topping pattern — a test of support at 16,000 now seems likely over the next week. This should pressure the Federal Reserve into cutting its rate hike forecast at its March 16 policy announcement. Any slipup would result in a breach of critical support levels and send the Dow Jones careening back to ultra-critical support at 15,500.

In response to this new weakness, here are three charts to keep an eye on: Tesla Motors Inc (NASDAQ:TSLA), Expedia Inc (NASDAQ:EXPE) and iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX).

Tesla Motors Inc (TSLA)

Tesla Motors Inc (TSLA)

Everyone’s favorite electric car maker TSLA is looking vulnerable and toppy after an impressive 50% rally off of its February low near $140 as hype builds for the March 31 launch of the $35,000 Model 3. The drop into the low was the culmination of a long consolidation pattern going back to 2014 that was associated with the top in crude oil.

Activist short selling research house Citron recently tweeted that the stock was headed down to $100 by year’s end on both supply and demand problems as focus remains on the company’s cash burn rate.

Expedia Inc (EXPE)

Expedia Inc (EXPE)

Travel planning stalwart EXPE bucked the broad market doldrums on Thursday to jump up and out of its three-month downtrend — retaking its 50-day moving average for the first time since late December. The next test will be hurdling the $110 level that stalled a rally in the middle of February.

The catalyst for the move, which came on the best volume since Feb. 17, was an upgrade by analysts at Piper Jaffray on its HomeAway acquisition and confidence in the company’s core business.

iPath S&P 500 VIX Short Term Futures TM ETN (VXX)

iPath S&P 500 VIX Short Term Futures TM ETN (VXX)

With stocks looking vulnerable to a decline here, the CBOE Volatility Index (VIX), or “fear gauge” looks set to rise for the first time in a month. The VXX ETN tracks the VIX, and has enjoyed a surge of inflows totaling $500 million over the past week, according to SentimenTrader — a level of activity that has historically preceded rises in market volatility and the VIX.

I’m watching for a run back into the high $20s.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/03/3-big-stock-charts-for-friday-tesla-motors-inc-tsla-expedia-inc-expe-and-ipath-sp-500-vix-short-term-futures-tm-etn-vxx/.

©2024 InvestorPlace Media, LLC