It could have been worse, and for a while on Thursday, it was. The S&P 500 managed to partially cut into its intraday loss yesterday, though to only end the day down 0.21%. The market found some technical support, at least for now.
United States Steel (NYSE:X) drove much of that weakness, falling nearly 6% headed into its post-close earnings report. Solid results, however, buoyed the stock back to near breakeven levels in after-hours trading. Fluor Corporation (NYSE:FLR) was Thursday’s big loser though, falling 24% on an unexpected first-quarter loss and news that CEO David Seaton would be stepping down after eight years on the job.
Like most of its retail peers, Gap was re-victimized in 2018 as part of the next round of the retail apocalypse. The market stopped the bleeding early this year, though, and has held that line ever since. It even took a failed shot at pushing up and off that floor to restart a major, long-term rally effort. It failed though, falling back to that familiar floor.
But the potential for a surge remains in place, and the technical ceiling is well established right where it should be. The second effort to break above it could have better luck, and probably would have better luck.
Click to Enlarge • The floor in question is $24.40, plotted in yellow on both stock charts. For whatever reason, traders drew a line in the sand there, and haven’t yielded.
• The resistance line to watch is $27, where shares have found highs since the beginning of the year with the exception of March’s short-lived surge.
• Though stuck on a sideways trading range, notice all the key moving average lines that have converged as of last month, and are now crossing over one another. That in itself should trigger programmed and automatic technical purchases, fueling the budding breakout.
News Corp (NWS)
News Corp shares had a rather rough 2018, and like most stocks, it was hit particularly hard in the fourth quarter. That looked to be a capitulation, given the bounce during the first quarter.
That effort has petered out in the meantime. So far the bulls have at least been able to hold back the selling flood gates, but as of yesterday’s close, NWS shares are once again teetering on a break under a well-established technical floor. And, the undertow is decidedly bearish.
Click to Enlarge • That make-or-break support line is around $12.26, plotted in yellow on both stock charts. That’s where News Corp shares has made all of its lows since February.
• Note the surges in bearish volume when NWS tests that support around $12.26. There are clearly more would-be sellers than buyers, and there may be many more waiting in the wings.
• The bigger trend of lower highs remains intact. That guideline is plotted in red on the weekly chart.
Citizens Financial Group (CFG)
Citizens Financial Group isn’t over its most relevant technical ceiling right now. But, it’s close, and a break above it wouldn’t just be a big technical event. It would be a catalyst that unleashes several weeks’ worth of pent-up buying.
Click to Enlarge • The line in the sand is the 200-day moving average line, plotted in white on both stock charts. That line acted as a ceiling in February, but may not be able to hold the bulls back this time.
• Bolstering the potential resistance around $36.40 is the straight-line resistance formed by the connection of all the major peaks going back to September. That line is plotted in yellow.
• While the momentum is respectable, the buying volume behind the uptrend so far isn’t impressive.
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.