It was touch and go for the better part of Friday’s trading action, with another drubbing for General Electric (NYSE:GE) leaving doubt in investors’ minds, while an unexpectedly solid 2.2% advance from AT&T (NYSE:T) hinted that the tide could be rising for all stocks.
GE shares fell 5.5% after Deutsche Bank analyst Nicole DeBlase cut her target price on the stock, while AT&T’s debt picture improved at the same time the company better explained its plans to take on streaming giant Netflix (NASDAQ:NFLX). As the closing bell approached for the day and the week, traders increasingly decided the glass was half full. The S&P 500 ended Friday’s action at 2760.16, up 0.82% for the day, and higher by 4.8% for the week.
Though work remains to be done and there are still some risks, a bullish foundation is being laid. As such, it’s not terribly surprising that plenty of stocks on Monday are hinting at bullish moves. Not all, however. Here’s what to note in Intel (NASDAQ:INTC), HP (NYSE:HPQ) and Prologis (NYSE:PLD).
Prologis is a name that has been off and on of our radar since September. For a brief moment two months ago it looked like it was going to punch through a major technical ceiling, but instead in October it peeled back to previous floor.
Now it’s back to within striking distance of the ceiling again, and though it has fooled us before, this time around could lead to a different result.
Click to Enlarge • The resistance line in question is right around $68, plotted with a yellow dashed line.
• Zooming out to the weekly chart puts the past several months in perspective. While Prologis is never not a volatile stock, this sort of stagnation is unusual. PLD may be overdue for some more prolonged action after this consolidation period.
• What’s different about this time around is support at a trio of key moving average lines.
For the better part of this year, Intel shares have been fighting a battle against fears that rival Advanced Micro Devices (NASDAQ:AMD) was going to crush it. Now that the dust is settling and the buzz is dying down, however, the market’s not nearly as sure the iconic company is as dead in the water as had been suggested.
Still, it took an encounter with an established technical floor to bring INTC stock back to within striking distance of what could be a catalytic bullish move.
Click to Enlarge • The catalyst was a hard crash with the early 2018 lows of $42.30, plotted with a red dashed line, to spark the bounce that’s currently underway. Since them, Intel shares have raced back to what’s become a cap at $49.30. That ceiling is plotted with a light blue dashed line.
• On the weekly chart, we see two clear buy signals. One of them is the Chaikin line’s cross back above the zero level a few weeks back, telling us there’s good volume behind the current effort. We also just saw a bullish MACD cross.
• The last potential technical ceiling is the $200-day moving average line, plotted with a solid white line, at $49.85.
Finally, though HP shares had been taking blows for the better part of this year, it was holding up rather well. Either the 200-day moving average line was serving as a floor, or a technical floor that started to take shape as far back as 2016 did that job.
As of last week, however, both of those lines have failed to remain a technical floor. Worse, as of Thursday and Friday of last week, the 200-day moving average line seems to be acting as a resistance level.
Click to Enlarge• The daily chart of HP offers the details of the new dynamic. Shares plunged two weeks ago, leaving behind a gap. The bulls tried to rebound on Thursday, but once the gap was closed, the bears dug in again, with the 200-day line never being crossed above again.
• The weekly chart offers some perspective the daily chart doesn’t. It’s in this timeframe we can see the momentum has been slowly shifting from bullishness to bearishness.
• The clincher is Monday’s low of $22.27. If HP stock breaks under that level, odds are good another wave of would-be sellers could dump their stake, putting a selling avalanche in place.
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.