The bulls continued to hammer out more gains last week, with the S&P 500 adding another 0.74% to its value on Friday, logging a record closer of 3,025.86. Although it might head off the expected interest rate cut, the first look at Q2’s GDP growth rate was a better-than-expected 2.1%.
Twitter (NYSE:TWTR) was the day’s breadwinner, up almost 9% on a second-quarter earnings and a revenue beat that included a strong improvement in the number of daily users checking into the micro-blogging platform. Mattel (NASDAQ:MAT) logged the bigger win though, up more than 13% following its improved earnings report for the second quarter.
Holding the market back, albeit ineffectively, was the 17.6% setback from flooring outfit Mohawk Industries (NYSE:MHK). The company fell short of last quarter’s top-line estimates, and fanned those bearish flames with a lackluster outlook for the remainder of this year.
However, the stock charts of Activision Blizzard (NASDAQ:ATVI), Viacom (NASDAQ:VIAB) and Advance Auto Parts (NYSE:AAP) are shaping up as the top trading prospects at the beginning of the new trading week. Here’s why, and what’s likely to happen next.
Advance Auto Parts (AAP)
Advance Auto Parts was on fire in 2018, and for the most part, it sidestepped the selloff that plagued most of the market in the final quarter of last year. This year has not been nearly as impressive, but at the very least, AAP stock has held its ground.
That’s one bad stumble away from happening though. If Advance Auto Parts shares slide even just a little bit lower, a long-standing, well-established floor could buckle. Worse, the chart has already dropped hints that the bulls are throwing in the towel.
Viacom shares have been back and forth since the latter half of 2017, making no net progress since then. It’s possible, however, that it’s in the midst of changing for the better. VIAB stock is testing a well-established technical ceiling, and it’s doing so as a result of a great deal of technical support. One or two more good weeks could snap Viacom shares out of a funk and put them en-route to a considerable upside target.
It’s only evident on the weekly chart, but since the latter part of 2017, Viacom stock has been squeezed toward the tip of a converging wedge pattern.
Activision Blizzard (ATVI)
For months now Activision Blizzard has been trying to rebound from last year’s huge stumble. None of those efforts have taken hold though. ATVI has been held back, mostly thanks to resistance at a well-established resistance level of $48.80, plotted in white on both stock charts.
There’s more structure and organization to the past few months than it readily seems, however. The hoped-for breakout may be nearer than traders fully appreciate, and a critical line in the sand is now within reach. The market may be unknowingly waiting to cross both bridges at the same time with a dramatic move.
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.