The bulls tried to follow through on Monday’s impressive bullishness, but just couldn’t make it happen. After spending some time above and below the previous day’s close, the S&P 500 ended yesterday’s action at 2,867.24, effectively even with Monday’s last trade.
Sangamo Therapeutics (NASDAQ:SGMO) did all that it could do to get the market off the fence, gaining 29% on the heels of news that its hemophilia drug SB-525, co-developed with Pfizer (NYSE:PFE), showed tremendous promise in early stage trials.
At the other end of the spectrum, Walgreens Boots Alliance (NASDAQ:WBA) was off nearly 13% after missing second-quarter estimates and subsequently dialing back its full-year earnings outlook. Instead of growing the bottom line between 7% and 12%, the drugstore chain now expects earnings to be flat. CVS Health (NYSE:CVS) fell in sympathy, though not as dramatically.
None of those names are well-suited for trading headed into today’s session, however. Rather, it’s the stock charts of Western Union (NYSE:WU), Wynn Resorts (NASDAQ:WYNN) and Twitter (NYSE:TWTR) that offer the most promise. Here’s why, and what to look for.
Wynn Resorts (WYNN)
Wynn Resorts, like most other casino stocks, suffered a worse-than-average 2018. At times things have looked different — and better — so far this year, but WYNN stock was never firmly out of the woods…
… perhaps until yesterday. Though far from being the ideal effort, Wynn Resorts stock has broken above three key resistance lines that make it easier and more likely to continue higher.
• The big flaw in the move is that a gap was left behind with Monday’s bullish open. The bears (and bulls, for that matter) may try to go back and fill it in.
• Even if the gap is filled, a renewal of the bullish effort would still be easier to muster after Tuesday’s incremental progress.
• The most plausible upside targets here are the horizontal resistance made in July, around $167.50, and the 61.8% Fibonacci retracement line at $160.
Twitter hasn’t made any net progress since its big plunge last July. That has been good and bad, in that shares also weren’t crushed during the fourth quarter of last year when most stocks were thumped.
There has been effective progress being made, though, which quietly started to come to fruition as of Tuesday. While not perfect, the bulls may have just tipped their hand.
• At the same time, Tuesday’s modest gain was still enough to push TWTR shares back above the 200-day moving average line plotted in white on both stock charts.
• Though the congestion gives Twitter shares time to build up steam to stage a breakout, there has been an alarming lack of volume behind the effort — bearish or bullish — thus far.
• Even if yesterday’s effort gains traction, the big catalyst is still a move above the horizontal ceiling around $36.
Western Union (WU)
Finally, Western Union shares have been on a tear since late-December but made huge technical progress earlier this week and late last week. With some momentum now behind it, WU stock appears ready to roll higher, though its plausible ceiling has also been well defined and doesn’t leave a ton of room for a big move higher.
• Unlike many other stocks making forward progress right now, there’s some volume behind the effort. This is evident in the growing green volume bars on the daily chart, but also indicated by the Chaikin line’s cross back above zero for the weekly chart.
• Though this breakout thrust looks healthy, there’s something about the $23 area that has been a problem in the past. Even if for purely psychological reasons, any rally effort should be monitored if and when it reaches that mark.
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.