The bulls tried, but before stocks could tiptoe too far into new-high territory, they balked. After reaching a new multimonth high, the S&P 500 peeled back to log its second loss in seven days. It’s not yet a reason to panic.
Shares of the energy drink outfit fell nearly 5% after Wells Fargo analyst Bonnie Herzog penned some concerning words about its future. Disney, meanwhile, was down more than 2% on the first day the Fox assets it doesn’t own were packaged up into their own entity, and their own stock. The cause-effect of that transaction, however, wasn’t a particularly tight one on Tuesday.
There were still some winners though. In fact, there was more “up” volume than “down” volume. Advanced Micro Devices (NASDAQ:AMD) was one of those winners, rallying nearly 12% following reports that Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) had chosen the chipmaker to power its new cloud-based video gaming platform.
Moving into Wednesday’s trading, it’s the stock charts of Viacom (NASDAQ:VIAB), General Mills (NYSE:GIS) and FleetCor Technologies (NYSE:FLT) that look poised for some significant movement. Here’s a closer look.
General Mills (GIS)
Back in mid-September General Mills shares were rallying, but had yet to clear a big technical ceiling around $47.83. That never happened. Although it tried for a few more days, eventually the effort was up-ended. By December, GIS stock had reached a low near $36.
The stock rebounded, however, and was able to rally right back to — you guessed it — the $47.83 area without actually clearing it yet. It may well happen, and if it does, it could lead to an explosive move higher after a tough 2017 and 2018.
That’s a huge “if” though.
Click to Enlarge • The technical ceiling is plotted with a yellow dashed line on both stock charts. If hurdled, the next-best ceiling is near $60. That’s where a Fibonacci retracement line awaits, and it’s near where the stock peaked in early 2018.
• The shape of yesterday’s daily bar says the bulls are not ready or willing to make the effort just yet. The open and close below Monday’s low on a day the market was up is a red flag.
• Still, moves above major technical ceilings are more of a process and less of an event. General Mills shares may need to pull back first and get a new running start.
FleetCor Technologies (FLT)
With nothing more than a quick glance at the chart, FleetCor Technologies looks like it’s still going strong. The rebound that got rolling in late December technically lasted through the end of yesterday’s trading.
Take a closer look at the daily chart of FLT, however, and you’ll start to see several red flags that suggest a pullback could be in the works … and soon. Though that outcome needs confirmation in the form of a lower close, the downside potential is too strong to ignore.
Click to Enlarge • Chief among the red flags is the shape of Tuesday’s bar. The open and close were right at the low for the day, and both in the shadow of an unusually high-low range. This suggests the bulls finally ran out of gas mid-day.
• Another key concern is the lack of volume behind Monday’s and Tuesday’s gains. The buyers have already bowed out.
• Fanning the bearish flames is the bullish gap that was left behind in early April. It now beckons FLT lower, to fill the gap in.
Finally, last week Viacom was pinpointed as a potential downside mover. Major pressure was being put on a key technical support level, and one misstep could break that floor.
That ended up happening the very next day, completing the sell signal. In the meantime, that bearish clue has been underscored by a couple more bearish hints.
Click to Enlarge • The floor in question is $28.32, plotted in yellow on both stock charts. Viacom fell under that floor on Friday, and has since made two consecutive lower closes.
• The first two of the past three bearish days haven’t been low-volume days either. The sellers are coming out of the woodwork, save yesterday.
• Zooming out to the weekly chart puts matters in perspective. It was ultimately resistance at the gray 100-day and white 200-day moving averages that pushed Viacom back into a full-blown downtrend.
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.