It could have been worse, though it could have been better as well. The S&P 500 ended Friday’s action at 2658.69, down 1.73% for the day, which was well above the low but well below the high. Advanced Micro Devices (NASDAQ:AMD) led the bearish charge, falling 8.5% as investors continued to entertain fears that the GPU market may not be nearly as strong as it was recently presumed to be.
A handful of names like LogMeIn (NASDAQ:LOGM) and Granite Construction (NYSE:GVA) logged huge wins, and the more prolific Tesla (NASDAQ:TSLA) was up another 5% on Friday, fueled by the company’s surprise third-quarter profit. There just weren’t enough names like Tesla or LogMeIn to get the market anywhere near to being in the black.
The overall environment makes it a bit tougher than usual to find decent qualified trading prospects, though there are still some compelling, reliable setups for those willing to look long enough. That search for traders might starts with a look at stock charts of Cisco Systems (NASDAQ:CSCO), Fortive (NYSE:FTV) and Walgreens Boots Alliance (NASDAQ:WBA). Here’s why.
Cisco Systems (CSCO)
For a short while this past week, it looked as is Cisco Systems shares were going to rebound, finding support at a key technical floor that has proven itself in the past. Thanks to Friday’s bigger-than-average stumble though, CSCO is dancing on the edge of a cliff, and inching closer to falling off of it.
If it slips all the way over the edge, there’s little that will be able to stave off a selloff.
• That retest of the long-term moving average line has been underscored by rising volume, suggesting more and more shareholders are bailing out the lower the stock sinks.
• If the 200-day moving average line fails to keep CSCO shares propped up, the next-best support area as the July low around $41.
To be fair, most stock charts from Friday more or less looked like the one Fortive shares left behind. It would be less than genuine to suggest it was somehow unique. Nevertheless, the shape of the FTV chart along with all the others does indeed hint that a pivot has been put in place. A bounce is more than a little likely, given the setup.
And in the case of Fortive, there is another good reason to expect a bounce is nigh.
• What has largely gone unnoticed about Fortive is that its low on Friday is also the same low that ultimately sparked all the bullish waves since last October. That level, around $69.60, is plotted with a blue dashed line on the weekly chart.
• While the stage may be set for bullishness, this is the kind of signal that requires confirmation in the form of a little bullish follow-through following Friday’s pivotal bar.
Walgreens Boots Alliance (WBA)
Last but not least, we took a look at Walgreens Boots Alliance back on Oct. 16, right after shares started to poke above a key resistance line.
The move ended up panning out, with WBA advancing relatively well the next few days. It gave all those gains back (and more) on Wednesday, but the action from Thursday and Friday says the bulls are ready to give it another go.
• Zooming out to the weekly chart we can tell this persistent momentum is actually part of a bigger breakout move stemming from the rally that crossed a falling resistance line going all the way back to April of last year.
• Sometimes the second-wind effort like this one ends up lasting longer than the initial breakout thrust does.
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.