This morning’s Big Stock Charts looks at three companies that are bucking the weakening trend in stocks. Mylan NV (NASDAQ:MYL), GoPro Inc (NASDAQ:GPRO) and Goldman Sachs Group Inc (NYSE:GS) are all seeing signs that they are set to break the market’s trend and continue moving higher, as each of their charts have given bullish traders a signal of higher prices to come.
Mylan NV (MYL)
Mylan shares have been beaten up over the last two days as the court of public opinion has dealt a blow to the shares over the pricing of the popular Epipen. This, of course, comes a few weeks after the company delivered positive earnings results. The media-driven decline triggers a favorite trade for technicians, an event-driven technical recovery.
Mylan’s decline has taken it to support from a very long-term trendline, its 50-month moving average (yes, 50-month). This trendline has been a rail of support for the shares since their fall in late 2015. Now, the same trendline has been able to stop each of the declines that followed the October 2015 bottom.
Hard chart support for Mylan shares lies at the $42 price, which served as a bottom in June and has been the site of a number of other consolidations over the last year. Technicians will refer to this chart support as a buying opportunity if we see the stock dip any lower.
From a shorter-term perspective, Mylan shares snapped into an oversold reading on the high volume fast-and-furious selling. There’s nothing like a news story to get the crowd to move out of a stock, quickly, and that’s what happened here. The knee-jerk selling has now caused a vacuum that is likely to at minimum trigger a dead cat bounce that will take the stock back to $46.
From the $46 level, we still expect the long-term momentum to carry the stock higher with a technical target of $47.50 before any heady resistance comes into play.
GoPro Inc (GPRO)
It’s been a while since GoPro shares popped up on the technical screens, but they did that yesterday as they finessed their way out of a technical oversold condition at the same time that they are heading towards staunch technical support. This appears to have the shares setting up for a rally into what many will expect to be a good holiday season for the company.
Technical support for GPRO is building at the $14 level, which is where our systems would have their target buying orders set. This is due to the recent cross-over (bullish) of the 20-day moving average above the 200-day moving average. Usually, technicians like to use the 50-day and 200-day, but our studies have found the use of the faster-moving 20-day to be more effective for technical traders.
The momentum on GoPro shares is the strongest that it has been since June of 2015, when the stock saw a pullback ahead a 20% rally. With sentiment so pessimistic towards GoPro, the stock is not only riding a stronger technical trend than it has seen in a long time, it’s also climbing the Wall of Worry to higher prices.
Goldman Sachs Group Inc (GS)
The market is all but ignoring the financials right now as technology stocks have all the attention. Remember though, an interest rate hike will affect these companies first, meaning that an improving technical picture will only bolster any move on interest rates.
Goldman Sachs shares have been one of the stronger positions in the financials and they’re getting ready to make a move above a significant technical mark.
The so-called “Dimon Bottom” that was marked on February 11 when the company’s CEO bought a half a million shares of the stock ignited a rally that shot the stock from $140 to $168 by April. This rally, gave way to selling and reverted right back to $140.
Now Goldman Sachs shares are breaking towards the $168 level with more momentum behind them, as well as some short-term technicals that should help bring traders into the pits to buy. Two days ago, the 20-day moving average crossed above the 200-day, a short-term bullish signal that will attract traders to the stock. Following this, a break above the $168 level is going to start generating wider interest in the shares as the stock breaks above this chart resistance level.
Bottom line, the momentum (MACD) indicators are strong, which will push a break back above this technically significant top for Goldman Sachs shares. That break will likely trigger a crowd-funded move towards a target of $195.
As of this writing, the Johnson Research Group did not hold a position in any of the aforementioned securities.
