Today’s three big stock charts looks at some technical green shoots that are showing in the current market as our models have identified Alibaba Group Holding Ltd (NYSE:BABA) and Automatic Data Processing (NASDAQ:ADP) as short-term bullish candidates for chart watchers. At the same time though, the models and our review of the charts show the potential rough road for Exxon Mobil Corporation (NYSE:XOM) shares as they break through another round of technical support.
Alibaba Group Holding Ltd (BABA)
For months, traders have been waiting for the breakout that it looks like they are getting today on Alibaba shares.
The online retailer has spent the last two months teasing traders as it traded in a range that threatened to break below $100 and above $104. Today, BABA shares finally made their move as they are trading 2.5% higher on increased volume to break the stock above $106.
More importantly to the short-term traders, Alibaba stock now trades above its top Bollinger Band, which suggests that the move is likely to draw other traders to this unusually bullish spike in the price.
Helping the intermediate-term argument for BABA stock is the fact that the 50-day moving average recently moved back above the 100-day trendline. For the momentum traders, this is another bullish mark in favor of higher prices on Alibaba.
Assuming the day’s trading maintains prices higher than $105.25 (top Bollinger Band), we should expect to see BABA make a surge higher over the next few weeks.
Automatic Data Processing (ADP)
Another round of positive jobs news on Friday has ADP shares on our radar as this stock has regained its technical strength after a post-earnings selloff.
Automatic Data Processing shares have been trading back at their highs and looking for a reason to breakout. Last week’s positive jobs report looks to be the catalyst. Remember, the growing jobs market is a fundamental positive for ADP and other payroll processors.
Automatic Data Processing shares have been hovering around overbought readings for the last week, but a slight pullback or even consolidation will set these shares up for a surge higher as they break into new high territory.
Momentum indicators are showing building strength in the underlying trend that traders should be taking note of as all that is remaining is a trigger event for the stock to surge higher.
This being Fed week, we expect any mention of the jobs market in the FOMC’s comments to help act as a fundamental trigger. Traders should watch the $105-level as the “price trigger” for the next rally in ADP.
Exxon Mobil Corporation (XOM)
The energy sector continues to see weakness as falling crude prices have started to rattle the equilibrium that had set itself in place only a few months ago.
Exxon Mobil shares have now broken through what our models consider a significant level as they move below $82 and see an increase in selling volume.
XOM stock’s latest move continues the pattern of lower lows and lower highs that has plagued the price since July of last year. This pattern in Exxon shares now looks to target even lower prices on slipping crude oil prices.
Looking at long-term trends, a break below the $82 is likely to trigger a larger round of selling pressure on XOM shares that may target prices as low as $72 over the next six months.
As of the time of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
