It was anything but convincing, but the market mustered a small gain to end last week on a modestly high note. The S&P 500’s close of 2,826.06 was 0.14% higher than Thursday’s final trade, but it still marked the third straight weekly loss for stocks.
Roku (NASDAQ:ROKU) chipped in a fair amount, rallying 6.5% mostly in response to an improved price target. D.A. Davidson analyst Tom Forte now says shares are worth $18 a piece, touting the company’s newest advertising option. Total System Services (NYSE:TSS) logged the bigger gain though, jumping nearly 14% on the heels of news that Global Payments is preparing a $20 billion buyout offer.
Most noteworthy among the losers, footwear retailer Foot Locker (NYSE:FL) fell almost 16% in response to a lousy first-quarter print that forced the company to serve up a lousy second-quarter outlook.
Those tickers aren’t the top prospects headed into Tuesday’s action though. Rather, the stock charts of Centene (NYSE:CNC), Boston Scientific (NYSE:BSX) and Hewlett Packard Enterprise (NYSE:HPE) merit the closest looks.
Hewlett Packard Enterprise (HPE)
Hewlett Packard Enterprise may have logged a net gain on Friday, but the context behind it was anything but bullish. In fact, the shape and placement of Friday’s bar actually hints of a lot more downside, given the technical damage that was done. One more bad day could seal the deal.
- Notice on the daily chart that HPE only had to kiss the blue 20-day moving average line to spur some quick profit-taking.
- The intraday pullback also dragged Hewlett Packard Enterprise under the $14.40 mark, which isn’t the lowest low seen in months, but the most meaningful floor HPE has found since late last year.
- Backing out to a weekly view, we can see the tide has been bearish for a long while now. A string of lower highs, plotted in yellow on both stock charts, continues to steer things lower.
Back on March 1, Centene had just started a new bearish leg, unable to push its way back above some well-established technical ceilings. That selloff ended up materializing too. But, it also seems to have run its course. Within the past three weeks, CNC has fought its way out of that downtrend, and fought its way back above a couple of major resistance levels. There’s still some technical resistance ahead, but the undertow is compelling.
- Centene is back above the purple 50-day moving average line, but also now above the upper boundary of the falling trading range plotted with red dashed lines on both stock charts.
- On the other hand, the $57.40 area, plotted in blue, is still holding the rally back; the gray 100-day moving average line at $57.97 may also prove to be a ceiling soon.
- The weekly chart just completed a bullish MACD crossover.
- The bullishness that has taken shape since April has continued to materialize pretty strongly on bullish volume, even if it has been inconsistent. Friday’s gain was on especially strong volume.
Boston Scientific (BSX)
The last time we looked at Boston Scientific back on Feb. 7, it had just popped above an important technical ceiling. In the context of a much-bigger picture uptrend (framed by white dashed lines on both stock charts), it was an interesting trading prospect, even if the potential upside was limited.
That move panned out, with BSX rallying to what has since been defined as a new and more bullish rising trading range … a range framed by yellow dashed trend lines on both stock charts. Like clockwork, Boston Scientific fell all the way back to the lower edge of that new trading range, and also like clockwork, pushed up and off of it.
- As of Friday, BSX is back to that first technical ceiling, poised to break out again. Only this time, there’s even more upside potential than the last time we were here.
- The line in question is right around $38.60, plotted in blue on both stock charts.
- If the breakout effort continues to get traction, the upper boundary of the new trading range is around $42.50.
- You’ll have to squint to see it, but last week’s gain was made on healthy and increasing volume.
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.