The market may have logged gains yesterday, following through on Friday’s late recovery move. But, for a Monday, the follow-through was disappointing. The gain of 0.07% left the S&P 500 a bit below its intraday high, and the “up” volume behind the gain was alarmingly tepid for the first day back from the weekend.
General Electric (NYSE:GE) and Ambev SA (NYSE:ABEV) led the way, with 2.2% and 2.7%, respectively. Investors are still reasonably convinced GE stock has a decent future, while the latter continues to work on a turnaround effort that first took shape in late December. This is the most uninterrupted bullish progress seen since early 2018, and has carried shares back above the pivotal 200-day moving average line.
At the other end of the spectrum, Activision Blizzard (NASDAQ:ATVI) and its peers kept the brakes on any marketwide rally effort. It looked like the selloff was finally winding down as January came to a close, but the sellers dug in again starting late last week as Tuesday’s post-close earnings report looms.
As Tuesday’s action kicks off, stock charts of Micron Technology (NASDAQ:MU), Vulcan Materials Company (NYSE:VMC) and Citrix Systems (NASDAQ:CTXS) are the names to watch. Here’s why, and what to know.
Citrix Systems (CTXS)
After Monday’s action it would be easy to say Citrix Systems is stuck in a range, and not moving any particular direction.
A closer look, however, reveals there’s something of a method to the madness. Slowly but surely, the bears are chipping away, and a downtrend is already in development. A little more weakness could seal the deal, and drag shares below a huge — and relatively new — technical floor.
Click to Enlarge • On both stock charts, it’s now clear that CTXS is moving into the end of a converging wedge pattern that will force traders to make a commitment.
• The stage is already set, however, for downside. The purple 50-day moving average line has already fallen below the white 200-day moving average line, and as of Monday Citrix shares are back below off of their key moving average lines.
• The lower boundary of the wedge pattern, currently just above $100, will possibly halt any downtrend. If it doesn’t, though, there’s little that could bring an end to a wave of profit-taking following last year’s big runup.
Vulcan Materials Company (VMC)
The better part of the past several months have looked and felt nothing more than choppy for Vulcan Materials Company. But, as was the case with Citrix Systems, there’s been something going on beneath the surface. The brewing bullishness has become clearer within the past few days.
There’s just one more hurdle to clear before the budding rebound effort fully takes hold.
Click to Enlarge • Since November of last year, the gray 100-day moving average line had been holding Vulcan shares down. Last week, VMC moved above that line, and remained above that line when the sellers pushed back.
• The last line in the sand is $105.40, plotted in yellow on both stock charts. The bears have capped all the rally efforts since early January at that level.
• That’s more likely to happen than not, however. There has been decidedly more (and above-average) buying volume than not over the course of the past couple of weeks. The Chaikin line move above zero in mid-January.
Micron Technology (MU)
Finally, a week ago we explored how Micron Technology shares were moving up and out of a long-standing funk, and had just cleared another key technical hurdle. Though impressive, and telling, we wanted to see the move survive a major test.
That’s happened in the meantime. The sellers took a shot the next day, and continued to dig on. As of yesterday, though, the buyers took back control right where they were supposed to.
Click to Enlarge • The big line in the sand is plotted with a yellow dashed line on both stock charts, though the more detailed daily chart indicates there’s a second, minor resistance line that’s also been cleared.
• Although down on Monday, the selling stopped at the blue 20-day moving average line and the buyers started to wade back in to leave shares above the gray 100-day moving average line.
• The “clincher” here is now the next move higher, to confirm that Monday’s bar was indeed a pivot back into an uptrend.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley.