Today’s three big stock charts look at a few of the new leaders in the market and a previous leader that appears ready to make a quick comeback after an earnings-related selloff.
Shares of Adobe Systems Incorporated (NASDAQ:ADBE), Expeditors International of Washington (NASDAQ:EXPD) and American Airlines Group Inc (NASDAQ:AAL) are all flashing some bullish signs that indicate the stocks are likely to take a leadership role in the next rally.
Let’s look at why …
Adobe Systems Incorporated (ADBE)
Shares of Adobe have tumbled almost 8% after the company announced better than expected results for its last quarter’s earnings. ADBE stock immediately shot lower as the “sell the news” crowd locked-in profits. Now, shares of Adobe are showing signs that a short-term tradable bottom is in place.
- “Sell the News” dips almost always translate into short-term buying opportunities for nimble traders. In this case, the bounce from Adobe’s $145-price-level, which has served as chart support and resistance in the past.
- Monday’s final push lower saw ADBE shares ring the “oversold bell” as the RSI reached the bullish signal level of 30. It is always important to understand that this may result in nothing more than a dead cat bounce, but traders will still be able to act fast and profit even if that is the case.
- The Chande Trend Meter is still indicating that Adobe shares are not in a bearish pattern. A short-term reversal will put this indicator back into bullish mode with a target of $153.
Expeditors International of Washington (EXPD)
The transportation index has been creeping towards new highs, giving those that subscribe to the Dow Theory something to get excited about. Shares of Expeditors International are moving towards breaking into new high territory, adding some breadth to the Transports trade.
EXPD stock just signaled a rally indicating that it is likely to move the stock above $60.
- Expeditors International shares start the morning with a break above their top Bollinger Band. This indicates that the stock is entering a volatility rally that is likely to drive the price towards $60.
- Shares of EXPD are also prepared to benefit from a short covering rally as the current short interest ratio for the stock sits at 8. This, combined with the break into a volatility rally will certainly add buying pressure from shorts buying the stock to close losing positions.
- The RSI and Chande Trend Meter are both indicating that the stock has yet to reach overbought signals and that there is room for the growing momentum to move prices even higher.
American Airlines Group Inc (AAL)
Airline stocks are a mixed bag of late as fluctuations in oil prices and load management are playing games with the friendly skies. One company that is taking a leadership role among the airline companies is American Airlines along with Delta Air Lines, Inc. (NYSE:DAL) and Southwest Airlines Co (NYSE:LUV).
American’s daily chart activity is flashing bullish signs suggesting that the stock is ready for takeoff (sorry for the pun).
- Within the last week, shares of AAL have broken above their respective 50- and 200-day moving average. The 200-day remains bullish as it is trending higher; however, the 50-day is locked in a bearish pattern. The latter changing over the next week will catapult the stock higher.
- Shares are settling into a strong trend according to the Chande Trend Meter. A cross above 60 will indicate building strength in the trend and higher process.
- Finally, AAL shares are breaking back above their long-term, 10-month moving average. This will attract longer-term investors and portfolio managers that are looking for technical “values.”
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.