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A Change in Pattern

I tend to pay attention when patterns change, and this is a change in pattern -- also let's check the charts Facebook and Uber.

The Market

Well, there were a few things of note in today’s market, although I am not sure how much weight to put on any of them.

First, this is the first time since January that the Russell 2000 wasn’t up on the first day of the new month. I tend to pay attention when patterns change, and this is a change in pattern. I really thought we would get one more day of upside and I was wrong. Now, we’re in a market that is sort of short-term overbought. I say sort of, because of breadth.

Then there is the move in bonds. Take a look at the chart of the bond fund TLT (TLT:Nasdaq). The blue arrow shows the last big spike in bonds (rates lower). That was two weeks ago. TLT is closing in on those highs.

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Now, take a look at the SPDR S&P Bank ETF (KBE) - Get Free Report. It was at $47 two weeks ago and now it is at $49.

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Then there is Russell 2000 ETF (IWM) - Get Free Report. Two weeks ago it was at $210. Now it is at $219.

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So, this too, is a change. Are stocks ignoring bonds (for now)? Or will they play catch up later in the week? With the Bond DSI back at 85, this to me is what to focus on in the market this week.

New Ideas

I am no fan of Facebook (FB:Nasdaq) these days (I’m not a fan of the FANG names in general), but if you are looking for a trade, then Facebook is mere pennies away from filling that gap, and therefore is likely due a rally for a day or so.

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I was asked to follow up on Upstart (UPST:Nasdaq), the stock I seem to get asked about weekly. Last week, I was a fan, and now it is kissing some resistance. In this market I would say take a little off the table, but I do think it should breakout and get up near that $150-ish zone.

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Today’s Indicator

The 30-day moving average of the advance/decline line is back to not being oversold (it’s not really overbought, though).

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Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

EOG Resources (EOG) - Get Free Report is like so many of these energy and bank names. If they can’t hold here, it completes a top of sorts. But then there is the little top that it broke down from a few weeks ago (breaking $78). That measured to $70. That means if $70 can’t hold, you know you are wrong.

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The best news for the chart of Affirm Holdings (AFRM:Nasdaq) is that it bounced off support. The bad news is that it still hasn’t gotten up and over $70. I’ll call it trapped. However, I am optimistic because it did not break down. It’s trying to base and as long as it stays over that lower line it gets the benefit of the doubt.

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Uber (UBER) - Get Free Report is on the edge. If it holds here it’s still got an awful lot of resistance overhead to contend with. If it breaks I think it’s heading back to fill that gap near $35-$36 since it would not only fill the gap, but would complete a measured target off the top (blue line). Earnings are out this week so I would steer clear of it right now. On a drop to fill the gap I think you can buy for a trade.

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