Friday’s 0.07% gain for the S&P 500 was hardly a record-breaking advance. But, given that stocks were in the red to the tune of 0.9% earlier in the day, the willingness of traders to step back in headed into the weekend is quite encouraging.
Electronic Arts (NASDAQ:EA) and Coty (NYSE:COTY) led the charge. Shares of the video game publisher rallied 16% on word that its new Apex Legends game looked to be a serious competitor to the disruptive multiplayer title Fortnite, while personal goods outfit Coty saw its stock jump 32% after reporting quarterly numbers far in excess of expectations.
And yet, despite the marketwide gain, decliners outpaced advancers and the market’s “up” volume wasn’t as strong as its “down” volume.
Amazon.com (NASDAQ:AMZN) led the losers, falling 1.6% on an ever-growing, well-publicized battle with the National Enquirer that prompted some pundits to start talking about a succession plan. It’s arguably not necessary, and nothing to worry about. But, even small seeds of doubt can take root.
Headed into Monday’s open, stock charts of Hasbro (NASDAQ:HAS), NiSource (NYSE:NI) and Kimco Realty (NYSE:KIM) are the names to watch. Although none are likely to move into confirmed trends today, each could easily take a step in that direction.
With nothing more than just a quick glance at its charts, NiSource looks like a volatile, but ultimately unproductive pick. Its current price sits right where it was as of mid-2016, and it has crossed above and below that level multiples times since then.
There’s actually more going on here than is evident with a short look though. Slowly but surely, NI shares are working their way into the tip of a converging wedge pattern, which should lead to a sharp move once it breaks free.
Click to Enlarge • The wedge pattern in question is only evident on the weekly chart, framed by two white lines that have tagged all the major peaks since 2016, and all the major lows since early 2018. Until NiSource is out of that confinement, most moves should be short-lived.
• That’s not to suggest the travel between support and resistance isn’t tradeworthy action. In fact, as a relatively defensive utility name, NI is a nice holding to counteract any market pullbacks.
• Though it’s far from certain, given the inconclusive volume we’ve seen thus far, these rising wedge patterns tend to set up a pullback. If NiSource is going to be an exception to that norm, it will start with a move above the horizontal resistance line at $27.70.
Kimco Realty (KIM)
Kimco Realty shares have been toying with a recovery breakout for months, only to be up-ended each time one looked like it was finally going to take hold. It’s still entirely possible that could happen again to the current effort. There are some subtle clues, however, that suggest higher highs could finally be in store now that the right foundation has been laid.
Click to Enlarge • The rebound technically got going in June, when a long-standing falling resistance line, plotted in red on the weekly chart, was cleared. Since then, however, KIM stock has been content to only move sideways.
• Even as it was consolidating, though, a bullish thrust has been brewing. The big move since December may be it, given the swell of bullish volume seen since the beginning of this year.
• There’s still a ceiling at $18 that needs to be cleared, where Kimco peaked in June.
• It has been largely obscured by the stock’s volatility, but just within the past few days we’ve seen several bullish moving average crosses, including the cross of the purple 50-day moving average above the white 200-day line. And, for the first time in a long time, all four key moving average lines are sloped upward.
Finally, HAS stock’s situation was undoubtedly put in place by Friday’s huge surge from rival Mattel (NASDAQ:MAT), which gained 23% after reporting a surprising fourth quarter profit. Though one theoretically has little to do with the other, that move in many ways forced investors to make a decision about Hasbro.
They didn’t, technically speaking. HAS shares ended the day down a little, but lots of other stocks did the same. Yet, the intraday action still speaks volumes about what traders think of Hasbro, and what they now know they don’t know.
Click to Enlarge • The sheer height of the high-low range is telling. The bears were firmly in charge for a while, as were the bulls. By the time the dust settled though, traders were back to where they started to form a doji pattern (where the open and close are essentially the same, and at the midpoint of the day’s trading).
• Friday’s trading also confirmed what was only suspected before then … that the purple 50-day moving average line is a key floor, and the gray 100-day line is a ceiling. With each being brushed only to send the stock back in the other direction, it will take a move beyond either to get a prolonged move going.
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.