September moves into the rear-view mirror as a winner, as the S&P 500 index and other major indices bucked the seasonality trend to continue the summer of ’17 rally. Despite feeling long in the tooth, the rally still has some areas and sectors that are showing signs of outperformance as we look to October’s trends.
Today’s three big stock charts looks at the trends of Tesla Inc (NASDAQ:TSLA), Nvidia Corporation (NASDAQ:NVDA) and Snap Inc (NYSE:SNAP) as three stocks that are preparing to make short-term bullish moves that traders should be able to profit from.
Tesla Inc (TSLA)
Tesla has been getting pressure from many fronts. First, the car manufacturer faces increasing competition for electric and autonomous vehicles. Second, pressure from negative media takes on the company as seen in this weekend’s Barron’s as the weekly periodical panned shares of TSLA. The stock is trading at a level that should see some buying interest enter the market though, providing a potential short-term trading opportunity.
- Tesla stock spent three days last week trying to hold on to chart support at $340. This price has acted as support or resistance seven times in the last three months, so traders’ reaction to the price will be key in the next 5-10% move.
- The RSI for TSLA shares is nearing an oversold reading as the indicator currently stands at 38. Shares of Tesla have historically been very sensitive to oversold readings of the RSI as traders want to jump on the volatility bounce.
- Another round of chart support sits at the $330 price, where shares of Tesla would be firmly in oversold territory. Aggressive traders willing to wait for an opportunity to buy Tesla on a deeper pullback will be eyeing this price as a buy trigger.
Nvidia Corporation (NVDA)
Nvidia shares have been one of the most-hated performing stocks over the last year. The shares only recently started getting very favorable mention among fundamental analysts that are still trying to catch-up to the incredible performance of this semiconductor leader.
The charts are indicating that another rally is building as we head into October.
- After topping-out at $190, shares of NVDA pulled back from an overbought reading of their RSI. The stock has now consolidated at $170 and formed a short-term bottom in a move to get ready for a charge higher.
- Despite the pullback, Nvidia shares still remain firmly in a long-term momentum trend that is targeting a break above $190. If this break comes within the next week, the stock will be likely to trigger a volatility rally that will break through $200.
- NVDA stock continues to benefit from support generated by its 50-day moving average. This rising trendline is also accompanied by a rising 20-day trendline, which indicates that active traders continue to buy the very shallow dips in the stock.
Snap Inc (SNAP)
As popular as shares of Snap have been among investors, the trend for the stock has never been something that should have attracted intermediate- or long-term investors, until perhaps now.
We’re seeing signs that the stock may have finally hit a tradable bottom, something worth considering as traders have been migrating from lofty valuations in the tech sector.
- Shares of Snap recently posted a Double Bottom pattern as they found support at $13 for the second time since August. A Double Bottom is one of the strongest bullish technical patterns when identifying a new rally.
- In addition, Snap stock has been finding shorter-term support at the round-numbered $14 level. This is helping build a stronger intermediate-term bottom for the shares.
- As a result of the longer-term bottom building in Snap stock, the stock’s 50-day moving average is now transitioning into a bullish pattern. This suggests that the upside potential for the stock is growing. On a note, this is the first time that the 50-day trend has turned bullish since the stock IPO’d, the first time!
- Watch for a hold of $15.00 to draw even more buying volume in to the stock and drive Snap towards an intermediate-term target of $17.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
