Following through on Wednesday’s stumble, the S&P 500 lost another 0.9% of its value on Thursday. Investors are struggling to find the silver lining in the Federal Reserve’s recent commentary in the shadow of a few too many earnings shortfalls.
General Electric (NYSE:GE) was a key driver of the setback, falling 3.3% following news that CFO Jaime Miller would be stepping down. The company, in the midst of a difficult turnaround, might struggle with such a disruption. Bank of America (NYSE:BAC) fell 3.9%, as investors fear the impact that the recent rate cut might have on its lending business margins.
There were a few names that managed to make forward progress in the midst of the fairly indiscriminate selloff. Etsy (NASDAQ:ETSY) was up nearly 2% during Thursday’s regular-hours session. Even then though, ETSY shares tumbled more than 2% after the close when it reported last quarter’s revenue fell short of expectations.
As for tickers that may be worth a closer look headed into the last trading day of the week, however, it’s the stock charts of Occidental Petroleum (NYSE:OXY), PepsiCo (NASDAQ:PEP) and Verizon Communications (NYSE:VZ) that merit closer examination.
Occidental Petroleum (OXY)
It has more to do with oil prices than with Occidental Petroleum in particular, and if it’s going to last, it’s going to do so because the energy sector as a whole is going to help lift it. But, no other oil and gas name besides OXY stock has made as much technical progress this week. Among the sector, it’s possibly the top prospect right now.
Click to EnlargeOccidental was already in an uptrend, but yesterday’s outside day, where the open was below Wednesday’s low and the close was above Wednesday’s high, speaks volumes about billion conviction.
- The volume surge on Thursday also says there are more bulls waiting in the wings, willing to buy on a dip.
- Just within the past couple of weeks, the purple 50-day moving average line and the blue 20-day moving average line have started to serve as a floor, laying the foundation for more forward progress.
Verizon Communications (VZ)
Verizon Communications has been on the radar for a while now. Although it logged a heroic 2018 despite headwinds felt by most other names, that strength has started to buckle this year. Lower highs have been the norm, and VZ stock has put repeated pressure on critical floors.
This week’s stumble, however, has largely put the final touches on a long-brewing pullback. Although Wednesday’s setback and Thursday’s equally big intraday pullback have likely set up a small bullish pushback, the bigger-picture trend just took a turn for the worst.
Click to EnlargeVZ stock attempted to rebound from Wednesday’s plunge under the 200-day moving average line, plotted in white on both stock charts. All it took was a kiss of that line on Thursday to up-end Verizon shares again.
- With this week’s setback, the purple 50-day moving average line has broken below the 200-day moving average … a so-called “death cross” that often takes shape before a more dramatic pullback.
- A much longer-term support level plotted on the weekly chart is also now under attack.
A little more than a week ago, PepsiCo was pegged as a breakdown candidate. Already overbought and ripe for profit-taking, a move under a couple of key support levels suggested something worse could be in store.
PEP stock continued to slide a little lower the next couple of days before bouncing back. The way, and where, PepsiCo hit resistance again and then rolled over confirms how vulnerable the stock was. Yesterday’s action may have been something of a death blow to the struggling stock.
Click to EnlargeAs of Thursday, the blue 20-day moving average line has fallen under the purple 50-day line for the first time in months, after last week’s turnaround effort was halted at those lines.
- It looked like the gray 100-day moving average line might stop the bleeding on Wednesday, but marketwide weakness broke that floor with Thursday’s close being under it.
- The long-term view of the weekly chart puts things in perspective. PepsiCo is no stranger to wide swings, up and down.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley.