It was back and forth all day long on Wednesday, but when all was said and done, neither side could make a solid commitment. The S&P 500’s loss of 0.16% left it at 2,879.42, or right in the middle of its daily range. A key technical floor remains intact.
The modest day for the market doesn’t mean all stocks saw modest moves. Chesapeake Energy (NYSE:CHK) popped more than 3%, shrugging off a first-quarter revenue miss when all other metrics came in strong. Match Group (NASDAQ:MTCH) rallied a little more than 12% thanks to last quarter’s impressive subscriber growth.
At the other end of the spectrum, Tripadvisor (NASDAQ:TRIP) tumbled more than 11% on Wednesday, while ADT (NYSE:ADT) fell almost as much. Last quarter’s decline in the number of unique visitors at Tripadvisor’s sites spooked investors, and ADT booked a surprising loss during Q1.
None of those names are particularly great trading setups headed into Thursday’s trading though. Rather, it’s the stock charts of Vornado Realty Trust (NYSE:VNO), Xerox (NYSE:XRX) and Cboe Global Markets (BATS:CBOE) that offer the most potential. Here’s why, and what to look for.
Cboe Global Markets (CBOE)
Cboe Global Markets may have gotten a slow start to the year, but things perked up in a big way last month. In fact, the big move carried CBOE stock above a couple of key lines that so far appear to be catalytic. And the budding uptrend was confirmed last week when the bears tried to quell the rally but the bulls held the line right where they should have.
- Since late last year, Cboe Global Markets shares were squeezed into the tip of a converging wedge pattern that finally broke in April via the move above resistance levels of $98.44 and $99.52.
- The cross above the white 200-day moving average line last month petered out, but when CBOE stock peeled back last week, the 200-day moving average became a springboard to push the rally to higher highs.
- Zooming out to the weekly chart we can see this rally effort was built up gradually, leading to a bullish MACD cross as well as the Chaikin line’s cross above zero. The slow pace of these clues means the advance is sustainable.
Vornado Realty Trust (VNO)
It arguably has more to do with REITs in general than Vornado Realty Trust in particular. Nevertheless, there’s a budding downtrend in the works that’s actually just part of a longer-term downtrend. One more slip-up could push VNO over the edge of the cliff, so to speak, and a few too many of the most telling signs are saying the chart is fighting a losing battle.
- The line in the sand is $65.88, plotted in yellow on both stock charts. That floor touches all the key lows since March, including yesterday’s low.
- The sellers are starting to come out of the woodwork too, in earnest. The volume behind the selling was seen in just the past few days and it is well above average … more may be waiting to see if things are going to worsen.
- Fueling the weakness is repeated resistance at the white 200-day moving average line. Each recent instance is highlighted in blue. Traders have good reason for their doubts.
Finally, Xerox had a great showing during the first four months of the year, but it may have traveled too far, too fast. Now feeling the weight of that big advance, cracks are starting to form. A key floor has yet to snap, but other important support levels have already crumbled. And, traders’ interest has turned bearish … not just waning bullishness.
- As of Wednesday, XRX is back at a near-term support line that lines up all the lows since March. That’s plotted in white on the daily chart.
- Traders are starting to take profits in earnest too. Within the past three weeks, the highest volume days have not only been bearish ones, that volume has been above average.
- Although not yet under straight-line support, Wednesday’s weakness dragged Xerox below the purple 50-day moving average line. That’s a start to a pullback.
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.