Stocks started and finished the day in the black on Thursday, but did so without the help of several of the usual suspects. Netflix (NASDAQ:NFLX) ended the day down a bit, while Advanced Micro Devices (NASDAQ:AMD) tumbled 5.4% for no clear reason … other than the possibility that the sheer weight of its recent gains is starting spook newcomers.
Apple (NASDAQ:AAPL) did most of the heavy lifting, up 2.4% as investors further digested the newly unveiled iterations of the iPhone. Micron Technology (NASDAQ:MU) jumped 4.5% on Thursday, bouncing back from a new multiweek low made Wednesday after Goldman Sachs rang the alarm bell.
All told, the S&P 500 advanced 0.53% yesterday, and the Dow Jones Industrial Average’s close of 26,145.99 was its best close since January.
As the last trading day of the week gets going, traders may want to take close looks at the stock charts of Comcast (NASDAQ:CMCSA), PPL (NYSE:PPL) and Lockheed Martin (NYSE:LMT). They’re the names with the most potential … and coincidentally, the potential for all three is leaning bullishly.
Late last month, Comcast was one of the highlighted daily stock charts. After finding support at the 20-day moving average line (plotted in blue) for weeks, the bulls finally pushed hard enough to carry the stock above the white 200-day moving average line. That event can often be catalytic.
CMCSA followed suit for a few days, but once August became September, the buyers lost interest. After Thursday’s jolt at just the right spot though, the longer-term uptrend is back in motion … or maybe it was never stopped to begin with.
Click to Enlarge • The 2.6% pop is impressive, but more meaningful is the fact that once again Comcast shares were able to use the 20-day moving average line. The strong (though not dangerously unusual) volume behind the move is telling.
• Zooming out to a weekly chart, we can see that Thursday’s rebound was actually just the continuation of a rather well-framed uptrend, marked by two rising, white dashed lines.
Lockheed Martin (LMT)
It’s not entirely clear if investors are seeking out defense contractors as a means of playing defense, or if investors think these organizations will thrive in an environment that may not be quite too bogged down by tariffs. Perhaps it’s a bit of both.
Whatever the case, thanks to the respectable 1.8% advance Lockheed Martin shares mustered on Thursday, the stock’s over a major hump and poised to resume last year’s amazing rally.
Click to Enlarge • The ceiling in question is around $329.64, though on the daily chart you’ll see two technical ceilings plotted in yellow, dashed lines. They both represent peaks made by LMT in recent weeks. It doesn’t entirely matter though. Both have been hurdled after the stock was able to push up and off of some key moving average lines.
• It’s not ideal, but the spirit of an upside-down head and shoulders pattern is evident. The head and both shoulders are marked with pink arrows. With the ‘neckline’ broken, Lockheed Martin may be catapulted higher.
• Should the small victory get traction, the most plausible target is around $362, where shares peaked three times early this year.
Last but not least, PPL was on focus back on Aug. 14. At the time, the stock hadn’t cleared any major technical ceilings, but all indications were that it would.
And, it did. It cleared all of them, including the 200-day moving average line plotted in white on both stock charts. That move may have been a bit overheated though, as PPL has since gapped lower.
In some ways that may have been the best thing for it though. The bulls have regrouped right where they needed to put together a second, longer-lasting bullish wave.
Click to Enlarge • The 20-day moving average line, blue, was once again the instrumental floor, halting the selloff when the stock tumbled on the 7th. That day is marked with a yellow arrow. Since then, the rising 20-day moving average has continued to guide shares upward.
• Simultaneously, we’re now in the shadow of several bullish crosses of moving average lines. After a steep, 30% selloff between mid-2017 and mid-2018, to see bullish moving average crossovers is a strong sign that the tide has turned for the better in multiple timeframes.
• One thing missing from the effort thus far is volume – the rally effort will need more of it if it’s to be sustained. The more support PPL finds at the 20-day average though, the more the bulls will crawl out of the woodwork.
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.