The “certainty” rally appears to be dying off as investors look for the next catalyst to push stocks higher. While positive signs abound in retail stocks, biotechs like AbbVie Inc (NYSE:ABBV) are flagging into bearish trends again.
This morning, Wal-Mart Stores, Inc. (NYSE:WMT) shares are benefitting from positive data out of Black Friday and Cyber Monday.
Finally, Huntington Bancshares Incorporated (NASDAQ:HBAN) is showing signs of tiring from its recent ascent, a sign that the retail banks may be ready to take a rest. We’ll look at these three charts in today’s three big stock charts.
AbbVie Inc (ABBV)
Biotechnology stocks have been all over the place after the election results, as the market focuses on the infrastructure and financial sectors over the rest of the market. After seeing an initial climb, AbbVie shares trailed lower and threatened to hit their pre-election lows.
The recent selloff in AbbVie shares is concerning for the longer-term bulls as the price has sliced through critical support trends.
The 50- and 200-day moving averages have been supportive of the shares over the past few years and reliable triggers for technical traders. Prior to today’s pop, ABBV shares broke below this support at $61.38. Today’s 3.4% pop sent ABBV shares through resistance at $61.18, an area which may now act as support.
However, if today’s rally proves false, the next “line in the sand” from a technical perspective is the $58 level, which should see some buying. A break of this support will see shares pick up selling volume and a retest of $56. This price will be critical as the stock is already trading below its 20-month moving average (below), signaling bear market conditions for this once bright biotech stock.
Wal-Mart Stores, Inc. (WMT)
Like some stores over the Thanksgiving shopping season, Walmart was reported to have slow performance on their website because of the online holiday shopping, A sign that their online campaigns are fruitful. Also, it was reported that Walmart was one of the top five shopping destinations on Friday per Waze, a GPS application owned by Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL). The early signs are that Walmart may have the recipe right this year.
This news is good for Walmart shares that have been lacking technical confidence. Over the past month, shares have wrestled with a number of trendlines including the 50-, 100- and 200-day moving averages.
All three of these have played support or resistance to the price of WMT stock, but this is likely to change.
Walmart shares are looking to break above the $72 level, which would clear the 100-day moving average as the 50- and 200-day are now playing a supportive role at $70. The strength in these trendlines suggests that the stock should have more technical buyers moving into them.
Watch for this break to lead to a test of $74 and likely a move higher on any news from the holiday shopping results.
Huntington Bancshares Incorporated (HBAN)
Sometimes too much of a good thing can be bad. In this case, it’s buying as Huntington Bancshares stock is oversold and looking ripe for a short-term correction. Along with so many other regional banks, Huntington Bancshares has seen a significant rally as the thoughts of friendlier regulatory oversight and slightly higher interest rates add up to higher prices.
Shares of Huntington Bancshares have rallied more than 20% higher since the elections, triggering a huge overbought signal. In Huntington Bancshares case, the shares were slightly overbought in October, a signal that resulted in an 8% pullback. This time around, the shares are significantly bloated, indicating that we are likely to see more drawdown than in the last pullback.
The east pullback would see Huntington Bancshares drop to their 20-day moving average, currently at $11.50. This would account for a 7.5% drop in share value and probably position the stock as a relative value for those traders that have been waiting on the sidelines for the opportunity to grab them on a dip.
A further decline to $10.65 would represent a move to chart support from historical tops in Huntington Bancshares prices combined with the stock’s 50-day trendline. This would be the level that all the technicians would probably come out to buy Huntington Bancshares and serve as an excellent entry for intermediate-term positions as the stock would be more than 13% lower than last night’s closing price.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
