It took a while for traders to decide what they thought of Friday’s surprisingly good first-quarter GDP report. By the time the closing bell rang though, the market saw the number as mostly bullish, driving the S&P 500 up 0.47% to a record-high close of 2,939.88.
Ford Motor (NYSE:F) and General Electric (NYSE:GE) did a great deal of the heavy lifting. Shares of the carmaker were up nearly 11% on a fantastic first-quarter print, while GE rallied almost 5%, as investors started to wade in before it posts its first-quarter numbers on Tuesday. The masses now seem to expect an encouraging set of figures.
At the end of the table, Intel (NASDAQ:INTC) fell 9% on the heels of a disappointing full-year outlook. Prior 2019 sales guidance of $71.5 billion has been pared back to $69 billion, down 3% year-over-year.
None of those names are great trading prospects after such wild swings in the rearview mirror though. Rather, it’s the stock charts of Weyerhaeuser (NYSE:WY), AES (NYSE:AES) and W W Grainger (NYSE:GWW) that merit the closest looks from traders.
W W Grainger (GWW)
W W Grainger has thrown lots of curve balls over the course of the past few months, to traders on both sides of the fence. Its true direction remains in question. As of Friday though, the bears seem to be on the winning side of the short-term ebb and flow, if — and this is a big if — the low from last week and the low from last month fails to hold up as support.
- That technical floor is around $286.30, plotted with a white dashed line on both GWW stock charts.
- As of last week, the gray 100-day moving average line has become a resistance line, after acting as support earlier in the month. Both of those events are highlighted on the daily chart.
- If and when the technical support at $286.30 fails to hold up as a floor, the next most likely landing spot is right around $265, plotted with a red dashed line on both stock charts. That’s where GWW stock made a double bottom over the course of Q4.
Sometimes reversals decisively take shape in an instant. Other times a stock gradually eases into one.
The rollover from shares of utility name AES is of the latter ilk. That is, after a nice rally in January, the advance slowed into an arc shape that as of last week has morphed into a full-blown, slow downtrend.
- The confirming clue is last week’s move below the purple 50-day and blue 20-day moving average lines, followed by a move to an even lower low and lower close on Friday.
- Bolstering the bearish case is the way the selling volume unfurled to above-average levels with Friday’s weakness.
- Zooming out to the weekly chart, not only is it clear AES stock became well overbought last month, we now have a fresh bearish MACD crossunder.
Like most other stocks, Weyerhaeuser had a pretty rough fourth quarter, but also like most other stocks, WY stock reversed course in late-December. That rebound petered out pretty early though, bumping into a familiar ceiling in early February and continuing to bump into it without crossing it all the way through the end of last week.
As of Friday though, that technical ceiling is once again being tested, and the buyers have shown their strongest hand yet. One more good day could get Weyerhaeuser over that key hump, and put it in position for one last major showdown. It already has the undertow it needs.
- The resistance line in question is plotted in yellow, tagging all the major peaks going back to November.
- Notice that Friday’s gain was formed on strong, above average volume. There may be more would-be buyers waiting in the wings than it seems on the surface.
- The next and last big ceiling that could come into play — if the aforementioned straight-line resistance is hurdled — is the 200-day moving average line, plotted in white on both WY stock charts.
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.