Another day, another win for the market. The S&P 500 gained another 0.69% yesterday, stopping short of reclaiming the multi-week high it brushed early this month.
General Electric (NYSE:GE) set the pace, gaining 2.7% in front of today’s investor presentation and despite the fact that it’s a supplier to the now-grounded Boeing 737 jets. Even so, Boeing (NYSE:BA) managed to make a small gain on Wednesday, following a couple days’ worth of serious, related damage.
At the other end of the spectrum, Roku (NASDAQ:ROKU) tumbled 14.1% after Loop Capital downgraded the TV-tech company on concerns that it was overvalued relative to its potential.
Headed into Thursday’s action, the stock charts of Franklin Resources (NYSE:BEN), Edison International (NYSE:EIX) and Viacom (NASDAQ:VIAB) are worth a closer look. They’ve each worked their way into a technical situation that could fuel major movement in the very near future.
The bulls have been doing their best to get Viacom shares back into a bullish groove since January, but it has just not happened.
As of Wednesday, however, the bears are actually gaining ground at the bulls’ expense. A tough session has dragged VIAB to the brink of a pretty serious collapse, against a backdrop of multiple red flags.
Click to Enlarge • Two big red flags are December’s cross of the 50-day moving average line below the white 200-day line and this month’s cross of the gray 100-day moving average below the 200-day average.
• The line in the sand is $28.30, plotted with a yellow dashed line. That’s where Viacom shares have found a floor since January, and they were testing that floor as of Wednesday.
• Yesterday’s volume surge is also a concern. A lot of sellers came out of the woodwork in a hurry on relatively tame news that AT&T was dropping some Viacom content from its DirecTV offering.
Edison International (EIX)
Sometimes it’s not a chart’s action that’s telling, but how that stock reacts to a curveball.
That’s what makes Edison International so interesting headed into Thursday’s trading action. Following word that the utility company is at least partially responsible for 2017 wildfires, a big holder sold a huge stake very late in the day on Wednesday. Before the closing bell rang, though, a huge buy-in recouped all of the intraday loss and then some.
Click to Enlarge • That big stumble may have flushed out the weak hands, actually clearing the decks for a continued rally.
• Monday’s cross above the white 200-day moving average line is a buy signal in and of itself, but yesterday’s intraday rebound confirms it.
• The next big technical hurdle is around $70.80, plotted with a yellow dashed line, where shares peaked in October.
Franklin Resources (BEN)
It has been a choppy, inconsistent effort for the past several weeks, but there’s a method to the madness. And, as of this week, the tide may have officially turned for the better. Although the stock may once again pull back from this week’s strength, Franklin Resources is no longer bumping into resistance, and it’s finding plenty of support for the first time in a long while.
It took a couple of efforts, but thanks to this week’s strength, BEN is back above the white 200-day moving average line.
Click to Enlarge • This time, however, it crossed back above the long-term indicator by pushing up and off the purple 50-day and gray 100-day moving average line.
• Although difficult to ferret out, both the accumulation-distribution line and the Chaikin line on the weekly chart confirm there’s good bullish interest here. The volume has been especially bullish the past four trading days.
• The clincher will be the 50-day moving average line’s cross above the 200-day moving average, though there’s still room for a pullback between now and then.
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.