Movement is what pays the bills for active traders and investors. Without it, both long-side and short-side traders would be stuck going nowhere. Thankfully, there was plenty of movement in the stock market on Wednesday.
Sometimes it’s a mystery as to why stocks move the way they do. In other cases, we can pinpoint the catalyst that pushed a stock in one direction or another. In some instances, nimble traders can take advantage of the momentum when this happens.
Thursday’s big stock charts will concentrate on three names that had clear catalysts and noticeable price moves. The charts could help us to catch the move at the right time and, hopefully, profit from it.
Gilead Sciences (GILD)
Quite possibly the top news item on Wednesday was the announcement released by Gilead Sciences (NASDAQ:GILD) providing hope that the company’s novel coronavirus treatment, remdesivir, would be effective in treating the virus.
This development seemed to buoy the entire stock market Wednesday as the world desperately seeks good news concerning the pandemic. Let’s check out the GILD stock chart to see how this impacted the share price.
- Check out Wednesday’s crazy-looking candlestick for GILD stock. The candle’s body is small and there’s an upper wick. However, the most noticeable feature is the giant lower wick, which suggests that the sellers were foiled in their attempt to push the share price down.
- The stock price has cleared the 20-, 50-, and 200-day moving averages. In theory at least, it should be blue skies from here.
- There’s an upward-leaning resistance line at around $87. Watch for a breakthrough above that line before considering the next upper levels.
Shelter-in-place orders have taken a major toll on the aviation market. Boeing (NYSE:BA) is a giant in this market, and shareholders have had a tough time in 2020 due to the spread of the coronavirus.
On Wednesday, it was revealed that Boeing’s first-quarter net income was steeply negative. In fact, the quarterly loss came to $641 million. Boeing is also currently seeking to downsize its workforce.
It will be interesting to see how this news affected the BA stock price. Will it be a catalyst for gains, or a loss?
- Is this a dreaded “shooting star” candlestick we see? Wednesday’s candle has a small body and an upper wick that’s bigger than the body. This suggests some selling pressure even though the close was in the green.
- BA stock is battling with the 20-day moving average now. How traders navigate this key level could determine the future price action of this stock.
- Heavy volume indicates that the traders, both bullish and bearish, were out in full force on Wednesday. Let’s hope that this exciting action continues in future trading sessions.
One headline-grabbing catalyst revealed on Wednesday will be of great interest to Nio (NYSE:NIO) stockholders. Reportedly, Nio secured a cool $1 billion worth of investment capital from entities in Hefei, China, which is where Nio’s factory is located.
Nio’s official statement is that the funds will enable the company “to support its business development, to enhance its leadership in the products and technologies of smart electric vehicles and to offer services exceeding users’ expectation.”
A glance at the NIO stock chart will tell us how the investing community reacted to this exciting development.
- The main feature of this chart is the giant symmetrical triangle that’s been gradually forming. This implies that the price action is narrowing.
- The NIO stock price is above all three of the major moving averages on the chart. That’s certainly in the bulls’ favor. It’s also encouraging that the trading volume seems to be picking up.
- Be advised that there’s moderate resistance at the $5.25 level. Taking profits there would be a cautious move, and caution is usually rewarded in these turbulent markets.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.