It wasn’t a screaming victory, but Thursday’s 0.45% gain for the S&P 500 marks its fifth gain in a row. Observers are gaining confidence, though shrinking volume says actual participants are thinning out.
Bed Bath & Beyond (NASDAQ:BBBY) led the way with its 16.6% romp in response to an unexpectedly strong 2019 outlook. Twitter (NYSE:TWTR) made some bullish waves as well, however, up a healthy 2.6% after Bank of America’s Merrill Lynch upgraded TWTR stock from “underperform” to “buy,” citing an opportunity to improve user engagement.
There weren’t a whole lot more advancers than decliners though, with Target Corporation (NYSE:TGT) doing the most collective damage. Shares of the big-box store were off 2.9% in sympathy with a couple of alarming reports from rival retailers.
While the marketwide rally is anything but sweeping, that’s beneficial in the sense that winners are separated from losers and actual trends can develop without the market’s interference. To that end, stock charts of General Electric (NYSE:GE), Hologic (NASDAQ:HOLX) and MGM Resorts International (NYSE:MGM) are among the best of those bets heading into the weekend.
More than once in recent months Hologic has merited a closer look. The converging trading range has been building up some pent-up action. It just needed the right catalyst to put that move into motion … higher or lower.
It looked like that was going to happen in November, in a bullish direction, but the broad market tide had other plans for HOLX. Thursday’s break back above the long-term technical ceiling, however, may be the one that sticks now that the market is helping.
Click to Enlarge • The converging trading range in question is plotted by white dashed lines on both stock charts. Hologic is back above the upper edge of that range as of yesterday’s close.
• Still, given the fake-out seen a few weeks ago, the smart-money move here may be waiting to see if HOLX can push back above the technical ceiling around $45, plotted with a yellow dashed line.
• While the undertow has actually been bullish for several weeks, any move between here and $45 is unlikely to be a straight line. It still may be worth the wait, however.
General Electric (GE)
Though well up from its late-December low, the gain General Electric shares have dished out since then has been in question. The doubters were feeling particularly vindicated on Tuesday and Wednesday, when the advance stopped and reversed.
Looking back on Wednesday’s and Thursday’s bars, however, the bullish case for GE may be even better now specifically because of the stumble.
Click to Enlarge • Wednesday’s bar, marked with a yellow arrow, only had to kiss the recently hurdled 50-day moving average line, plotted in purple, to renew the buying effort. Thursday’s follow-through confirms Wednesday’s doji was indeed a pivot.
• The previous line in the sand is still in play, however. That’s the $9 area, where General Electric has found a ceiling more than once in recent weeks.
• Looking back, the November meltdown looks like it could have been a capitulation of sorts. We’ve seen more buying volume for GE now than we have in months.
MGM Resorts International (MGM)
Finally, three weeks ago, MGM Resorts International looked like it was in massive trouble. As of two weeks ago, that idea was in question. One week ago, MGM looked ready to take flight. As of this morning, nobody has a clue. Thursday’s action raised far more questions than answers.
The good news is, the bulls and the bears are going to have to make a decision soon. The lines in the sand are pretty clear too.
Click to Enlarge • The shape of yesterday’s bar is telling. The bulls were content to pile on early on, but by the end of the day most of the bulls were getting back out again. This looks like the pivot out of the uptrend.
• Or, maybe it isn’t. The buying volume this week has not only been above average, it has been growing too. On the weekly chart we’ve got a fresh MACD buy signal and a Chaikin line back above zero.
• A pause here isn’t surprising, as the white 200-day moving average line comes into view. From here, the bulls will have to either take MGM to the next level or throw in the towel. If the 200-day line can be hurdled, that should be a bullish catalyst.
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.