Another day, another big move in the markets. If you thought the volatility would cease this week, surely you were disappointed on Tuesday as the sellers asserted themselves. Today’s big stock charts are inching toward support.
Congress debated the finer points of a small business relief bill on Tuesday, adding tension to an already tense market. Meanwhile, the ripple effects of the oil-price shock continued. Traders were confronted with the impact of slowing energy demand and a lack of storage space for crude oil.
Amid this challenging backdrop, some stocks headed towards noteworthy support lines. These lines can help traders to define their “buy zones” so they can start to plan ahead. This will be of interest to any investor who likes to “buy low, sell high,” as the old saying goes.
I won’t keep you in suspense any longer. Here are three big stock charts for Wednesday featuring names that are heading towards support lines that could turn out to be quite significant.
A favorite of Warren Buffett, investors rely on Coca-Cola (NYSE:KO) stock as a safe haven when times get turbulent. It’s one of those stocks that gets passed down from one generation to the next. Whenever the stock price dips, investors might consider grabbing some shares and holding them for the long haul.
- Tuesday’s candlestick is what’s known as a ‘shooting star.’ This includes a small body, a long upper wick, and a long lower wick. Chart experts often consider this to be a sign of market indecision and it could signal a reversal coming soon.
- The candlestick for Tuesday is directly on top of the 20-day moving average. Expect the bulls and the bears to battle over this crucial line over the next few trading sessions. A break upwards or downwards will be vital in determining the future path of the price.
- Notice the lower trend line, which suggests a support level in the lower $30’s. The price action has turned lower, so that lower support line could be a strong buy zone in the near future.
The payments-processing sector has been under pressure lately as people have tightened their wallets and purses. This factor has added some price pressure to Mastercard (NYSE:MA) stock. On the other hand, this could soon put the stock right into the buy zone for value-oriented investors.
- As you can see, the candlestick printed for MA stock on Tuesday has an upper wick. However, it’s not long enough to call it an inverted hammer, which would have been slightly bullish.
- Unfortunately for the bulls, Tuesday’s candlestick places MA stock below the 20-day moving average. That development puts the bears in control, at least for the time being.
- The trend line to the downside is definitely at the $200-level. MA stock bounced right off of that level once already. Therefore, look to $200 as a guidepost if you’re considering owning the stock shares.
Merck (NYSE:MRK) stock is a long-standing healthcare giant listed on the Dow Jones Industrial Average. Opportunities in this sector have come into sharp focus during the spread of the novel coronavirus. The last of our big stock charts could reveal a good buy price for traders seeking to capitalize on the ongoing demand for health care.
- Tuesday handed the bulls a huge red candlestick, which is not at all what they were hoping for. Worse yet, this occurred with rising volume.
- MRK stock is starting to break below the 50-day moving average. Moreover, it is also threatening to pierce downward through the 20-day moving average.
- You can see a giant megaphone pattern with the lower support line slightly below $65. The price action is bearish overall, and the bulls know that MRK must hold that $65 level or else things could get nasty.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.