Stocks were up again on Wednesday, but just barely … another day the bulls were hesitant to add to the recent rally. Politics played its role in the pause, but odds are good that the sheer weight of all the recent bullishness is what’s really holding the market back. The headlines are just an excuse.
Whatever the case, not every name was held back. Zynga (NASDAQ:ZNGA) jumped nearly 8% in response to news it had inked a deal with Walt Disney (NYSE:DIS) to develop Star Wars-themed video games. Target (NYSE:TGT) shares were up 3% on the heels of a much-needed strong showing from its second quarter report.
Neither of those names sport stock charts that have earned them a spot on Thursday’s list of potential trades worth watching though. And, despite the slew of still-bullish headlines, plenty of names are still knocking on the door of downside moves against a backdrop of a marketwide rally that’s still running out of gas.
For today, GGP (NYSE:GGP), Analog Devices (NASDAQ:ADI) and Citizens Financial Group (NYSE:CFG) are shaping up as your top trading prospects… at least until something dramatic changes their brewing situations. Here’s a look at those particular stock charts.
If GGP rings a bell, there’s a reason. It was one of the three stock charts put under the microscope back on July 26 as it began to rally out of a funk and pick up steam.
The stock has continued to wiggle its way higher, though not dramatically. But, it’s knocking on the door of a major technical ceiling that, if cleared, could still easily light a fire under this chart.
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• The ceiling in question is the 200-day moving average line (white), currently at $21.59. GGP actually moved above that mark a couple of times in the meantime, but couldn’t get going in earnest. The recent support from the 20-day moving average line (blue) found last week and this week may be just the springboard needed.
• While the uptrend has been wobbly at times, the overall volume is still net bullish. The accumulation-distribution line on the daily chart is now at multiweek highs. Ditto for the weekly chart.
• Should this potential breakout take hold, the previous ceiling at $23.85 is still the first checkpoint target.
Analog Devices (ADI)
When Wednesday’s regular-hours trading began, Analog Devices shareholders had good reason to worry. Though its fiscal third quarter report was a good one, ADI shares opened in the red … by more than a little bit. It took a while, but by the end of yesterday’s action the stock had fought its way back to a respectable 2.1% gain.
This is a case where the intraday action is more telling than the close-to-close price change. The bears had ample opportunity to drag Analog Devices below the pivotal 200-day moving average line. The fact that the bulls brought the stock back from the brink speaks volumes.
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• The daily chart makes the point clearly. All it took was a kiss of the 200-day line (white) to inspire an even stronger buyback that carried shares back above all of its key moving average lines. The volume surge on the way up says this was the majority opinion.
• Zooming out to a weekly chart it’s relatively easy to see just how important, and powerful, the 200-day moving average line has been in keeping the long-term rally going. This renewed bullishness is actually just part of a long-standing pattern.
Citizens Financial Group (CFG)
Last but not least, with nothing more than a quick glance it would appear Citizens Financial Group is still just a choppy, back-and-forth name.
Upon taking a closer look, though, it’s clear there’s more going on here than would seem with a mere cursory look. We’re seeing higher highs and higher lows for the first time in months, and there’s still plenty of room to keep running.
Click to Enlarge • The daily chart of CFG has already hurdled a couple of different falling resistance lines that had been guiding the stock lower as far back as February.
• Zooming out to a weekly chart we can see this turnaround has taken shape gradually … with some help (again) from the lower Bollinger band (yellow). That’s important. Slow, methodical U-shaped turnarounds tend to follow-through better than sharp V-shaped ones.
• Also on the weekly chart of Citizens Financial Group we can see a fresh bullish MACD divergence and a Chaikin line that’s just crossed above zero. Both are signs that the new bullish undertow is well-developed. It’s also evident in this timeframe that this is a pattern we’ve seen before from CFG.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.