3 Big Stock Charts for Wednesday: Chesapeake Energy Corporation (CHK), Nvidia Corporation (NVDA) and Mosaic Co (MOS)

Today’s Three Big Stock Charts takes a look at the technical failure that has us forecasting lower prices for Chesapeake Energy Corporation (NYSE:CHK), as well as two opportunities to get into shares of Nvidia Corporation (NASDAQ:NVDA) and Mosaic Co (NYSE:MOS), as recent selling pressure has pressed them to technical and price levels that should spark short-term rallies.

Chesapeake Energy (CHK)

With energy prices holding, one of our favorite technically traded stocks has made a move worth noting. Chesapeake Energy has been one of the more technically sensitive stocks that we’ve talked about over the past six months. Last week, in response to a positive earnings report, Chesapeake shares broke through technical support at $6. This level has held the stock for some time, but our analysis had suggested it would give way to lower prices.

So where now? Chesapeake will find its first round of support this morning at $5.50. This is due to the semi-round number nature of the 50-cent increment along with the fact that the stock’s RSI is now encroaching oversold levels.

From here, we’ll expect to see traders muster up the volume to move Chesapeake stock back to $6, where it is likely to put in a consolidation or sharp top. The latter will mean that the next 15%-20% move for Chesapeake is coming and it’s to the downside with a target of $5.

In other words, let the traders have fun with this one and don’t try to catch this falling knife.

Nvidia (NVDA)

Nvidia is all over our screen again today as the semiconductor company has shed more than 15% of its value after a great earnings report. The reason: profit-taking or “selling of the news.” The stock’s fundamentals haven’t changed.

Traders ran this stock up ahead of the earnings report in anticipation of a good number as the stock went from $102 to $120. In our eyes, even though we hold a bullish rating on the stock, this was the buy the rumor rally that was a setup for the “sell the news.” Now the news sellers have taken Nvidia shares back to the $100 level where they should find support enough for the short-term traders to enter the picture.

The stock will benefit from round-numbered support of $100. In addition, the shares hit an oversold reading last week at their lows. To put it into perspective, the stock hasn’t been this oversold since January 2016. Finally, a little lower, the stock’s 100-day moving average is lying in wait to help support shares if we were to see additional selling pressure apply itself.

With downgrades out of the way and technical trendlines ready to provide support, Nvidia shares should take out $110 over the next two months. This move will also put the stock back above the 50-day moving average and on the bull’s screens again.

Mosaic (MOS)

Another stock that has seen round-trip buying and selling after their earnings report is Mosaic. The basic materials company rallied from $31 to $34 and then sold-off back to $31 again. Now Mosaic sits at support from its 50-day moving average. This trendline currently resides at $31.27.

In addition, the stock has dipped into technical oversold territory, indicating that less buying pressure is needed to reverse the directional movement of the stock and trigger a short-term rally.

Mosaic shares are spending their third month in a row in a bull market trend as they trade above their 20-month moving average. This is attracting the analyst crowd with some upgrades, which should continue to fuel the positive technical picture.

Watch for a short-term bounce from oversold readings and support from the 50-day to help MOS move back toward $34.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/three-big-stock-charts-for-wednesday-chesapeake-energy-corporation-chk-nvidia-corporation-nvda-mosaic-co-mos/.

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