Stocks are getting off to a slightly mixed start this morning as traders continue to weigh whether they believe that the market can continue its melt higher.
Our technical filters found three charts of interest that the bulls should take note of, as Netflix, Inc. (NASDAQ:NFLX), United States Oil Fund LP (ETF) (NYSEARCA:USO) and Automatic Data Processing (NASDAQ:ADP) make our list of three big stock charts of the day.
Netflix, Inc. (NFLX)
The online streaming company got a price upgrade this morning, which is giving shares a boost right out of the gate. From the chart’s perspective, Netflix is looking like its ready to make a run back to its highs.
- Currently, NFLX is wrestling with its 50-day moving average, which has held the stock back from breaking into a full-fledged rally. A move above $155 will put this trendline behind Netflix stock and turn the price target towards $167.50.
- Shares of NFLX are working their way out of the oversold signal that was triggered when shares broke below $150. This is a bullish catalyst for the short-term.
- Some resistance may come into play as Netflix starts to approach $157.50 as this has proven to be a joy level for traders since May, watch how the stock reacts here closely as a move straight through it will likely build momentum for NFLX to go to new highs.
United States Oil Fund LP (ETF) (USO)
Oil prices are digging into new relative lows as we continue to see OPEC fail to balance supply and pricing with demand.
As a result, the traders are slamming shares of the United States Oil Fund into new 12-month low territory.
- The move is coming on relatively light volume, signaling that there is not much conviction from the short-term traders that prices of the USO will hold this low for long.
- From a short-term perspective, the United States Oil Fund is hitting an oversold reading, indicating that we should expect to see some buying come into the market, even if only for the short-term.
- Our technical models show a high likelihood that USO could trade back toward the $9.25-mark, but would likely run into technical rejection there and move lower again.
Automatic Data Processing (ADP)
Companies like Paycheck and Automatic Data Processing have been leading the market higher as rising employment continues to feed the fundamental picture for these stocks. In ADP’s case, the stock just hit some resistance, but expect that to turn into a buying opportunity for the shares.
- Today’s selling is based on the rejection from the stock’s top Bollinger Band. This should result in just a short-term pullback as the stock price returns to a more “normal” distribution. Traders will begin buying ADP stock again at that point.
- Automatic Data Processing shares’ 50-day moving average is in the process of transitioning into a bullish pattern as the trendline is now turning higher. This adds to the bullish outlook for the stock.
- The current pullback is also allowing the shares to work off some overbought readings from the RSI, indicating that more overhead room is being opened-up from a technical perspective. This should allow Automatic Data Processing to begin moving back towards $105 and higher.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.