Political uncertainty and interest rate concerns are bringing the market into its first real test since the post-election rally leveled-off in February. We’ve seen the major indices find support at their respective 50-day moving averages this week, which was a confidence booster for investors. But at the stock level there are some very large companies that are technically struggling and worthy of your attention.
Today’s three big stock charts take a look at the trends and targets of United States Steel Corporation (NYSE:X), Intel Corporation (NASDAQ:INTC) and Chevron Corporation (NYSE:CVX) as all three of these big named stocks are slipping into worrisome territory.
United States Steel Corporation (X)
Steel stocks have been trying to get out of their intermediate-term slump since topping in mid-February. Unfortunately, the excitement behind the restructuring rally has worn off as concerns over how Congress will move with the White House have increased.
Shares of X are now seeing a pattern of lower highs and lower lows that may be getting ready to extend itself to another step lower.
Currently, United Steel shares are in rally mode after seeing an oversold signal last week. At the same time, we saw the 100-day moving average give way for X shares to move lower. This breach of the intermediate-term trendline support should cause concern for United Steel shareholders.
In addition, the trend of the 50-day moving average for X stock is transitioning into neutral to bearish mode as it levels off and prepares to change into a declining pattern. Historical results show that this increases the probability of lower prices over the intermediate-term outlook.
The test for United States Steel stock will come over the next few days as traders try to guide it back above the 100-day trendline. Rejection at this price, currently $34.14, will almost certainly cause sellers to enter the picture again and target a move to $30.
Intel Corporation (INTC)
The semiconductor space has been a leading sector as companies like Nvidia Corporation (NASDAQ:NVDA) have outperformed the market. Unfortunately, pressure from the fundamentals have kept Intel in a lagging role against the sector.
INTC is heading into a technical squeeze play as the stock is trading within a tightening range drawn by its shares’ trendlines. Intel stock’s 50- and 100-day moving averages are perched just above its current price, while its 200-day is just below acting as support.
Historically these situations end-up in a volatile move as one or the other levels are broken.
In this case, the pressure above is what INTC traders should be watching closely as the 50-day moving average has been stifling for Intel’s attempts to break higher.
In addition, the current Bollinger Band pattern, which is tightening on INTC stock reflecting an upcoming volatility move, is drawing a top or resistance at the same level as the stock’s 50-day.
Trigger prices for the volatility breakout are $36 and $35.20 and tightening daily. The downside target for Intel is $34.80 to $34.
Chevron Corporation (CVX)
The energy sector has seen spates of buying interest as oil prices are on the rise again. Unfortunately, shares of Chevron continue to see technical selling.
The CVX chart picture remains bearish, despite a few days of buying. Overhead, Chevron has its 50-day moving average indicating a bearish outlook for the intermediate (one to three month) term.
In addition to the 50-day trajectory, the popular trendline recently crossed under Chevron shares’ 100-day trendline, indicating a strengthening bearish trend.
From a longer-term perspective, shares of CVX are teasing the bears as the stock is bouncing against its 20-month moving average. This trendline is viewed as the line of demarcation between long-term bull- and bear-market trends. A monthly close below the 20-month, currently at $109.50, would mark Chevron stock’s re-entry into a bear market trend.
For now, the CVX charts are indicating a high likelihood of this trend continuing with an initial target of $99.50 for support.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
