In a politically charged trading day, the S&P 500 hit it’s first 1% loss day since late-March. This move, based on headlines, not market fundamentals, may be the chance that traders have been looking for in terms of buying a dip.
Today’s Three Big Stock Charts takes a look at the charts of Apple Inc. (NASDAQ:AAPL), Allstate Corp (NYSE:ALL) and Citigroup Inc (NYSE:C) as three companies that may be presenting a “buy the dip” opportunity for nimble traders ready to jump in on these bullish stocks.
Apple Inc. (AAPL)
Apple is doing it right in big style right now. The performance of the stock has left some traders on the sidelines looking for an opportunity to buy the dip. We may have just seen that opportunity with Wednesday’s selling in AAPL.
Since surging after its earnings announcement, Apple stock had moved steep into overbought territory. Wednesday’s selling corrected that situation and brought AAPL back to more reasonable prices from the view of its RSI readings.
In addition, Apple shares pulled back down to the top of their regression channel that dates back to July of 2015. The top of this channel should afford the stock a catalyst to rally back towards its highs again.
For now, the stock has an easy target to $158, which is the top Bollinger band right now. A move there will likely see traders eye $160 as a mark to sell into strength again, but for now, the upside favors AAPL.
Allstate Corp (ALL)
Allstate stock has been a relative strength performer with shares returning 14% year-to-date, outpacing the broader market. ALL’s leadership has come from strong fundamentals and the backdrop of rising interest rates.
The strong performance results in technicals that point to a bullish intermediate-term outlook. Wednesday’s selling was light on Allstate shares as the stock was able to maintain the $84-level as support. This chart support has been building through consolidation over the last two weeks.
This consolidation has also allowed ALL shares to work-off an overbought technical signal that had been holding the stock back from breaking into a new intermediate-term bull trend.
Traders should consider the consolidation and chart support as a signal that Allstate stock is preparing for its next move to a target of $90.
Citigroup Inc (C)
Banking stocks have been in flux lately as questions about whether Congress will be able to move forward with any type of regulatory reform in the near future continue to rise.
Citigroup stock has been trading in a relatively volatile range over the last five months that is tightening its grip on the shares.
Support for C stock lies in the form of the 50- and 100-day moving averages that are trading just below current levels. This support kicked-in on Wednesday as Citigroup bounced from $59.
For the bulls, this is a potential short-term buying opportunity as the stock is likely to receive buying interest from the technical crowd. There is also a warning that comes from this signal.
A break below $58.50 is likely to trigger a round of technical selling that has the potential to take C stock to $55, which is the next level of support afforded to it by the 200-day moving average. This downside potential indicates a need to be nimble and ready to trade Citigroup quickly.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.