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Down and Upside Down

We finally went down and it was the inverse of the up days. Here's what I mean....

The Market

Well, we finally got a down day. It was the inverse of so many of the up days we’ve seen this past summer. By that I mean the index movers — the big-cap and mega-cap technology stocks — toss the major indexes around, but underneath breadth, or the majority of stocks, moved in the other direction.

All summer long, we saw the big-cap indexes move ever higher, while at the same time, the majority of stocks moved lower. That changed Wednesday. The big cap indexes moved down, while the majority of stocks moved up. Some call this value vs. growth. I call it the down-and-outers vs. the already-ups.

The down-and-outer stocks — stocks with bases — continue to act well, but they do not move the indexes. They simply don’t have enough market cap to do it. But when they move, there is a lot more opportunity to find stocks that are not just "everybody pile in" stocks.

Breadth was good. It was actually good enough to get the McClellan Summation Index to stop going down. It needs a few more good breadth days to turn this indicator up for the first time in a month or more. We even saw the 10-day moving average of stocks making new lows stop going up and attempt to roll over.

On the sentiment front the Investor's Intelligence readings did not disappoint: The bulls fell to 55%, while the bears moved up to 18%. Both of those are readings not seen since early July.

I am still of the mind that volatility is going to be an issue, but the good charts ought to prevail.

New Ideas

The first chart I want to show you is Shopify (SHOP) - Get Free Report, which broke $900 today. Now 15 dollars on a $900 dollar stock isn’t a lot, but if this stock cannot recapture that $900 area in a hurry, I think it can, over time, work its way down to the $750-$800 area.

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It has taken months for Capri (CPRI) - Get Free Report to finally move up and out of the base and get to the old high. It is now up about 45% from when I recommended it, and I think the time has come to take some profits. I might look to buy back what I sell under $20.

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Finally, a follow up on 3M (MMM) - Get Free Report, which I have liked for a while, and it hasn’t budged much more than a few bucks. I am still waiting for the breakout over $170 and at least a gap fill at $175 (arrow). It keeps trying and hasn’t been able to do it. I’m willing to be patient though.

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Today’s Indicator

The Volume Indicator is at 50%. It got a little bit oversold late last week when it tagged 48%. Currently it is neutral.

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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.

PNC Financial (PNC) - Get Free Report needs to break out already and get itself up and over this resistance. If it can do that, then the measured target would be back near the June high. I do not want to see it break under that $109-$110 area, though. One more thing, it needs to do it quickly, because it is so far into the apex of the triangle that I don’t want to see it just meander into the apex.

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STORE Capital (STOR) - Get Free Report is a good chart, but it is up 35% in six weeks, so it’s hard for me to love it here. There is a near-term measured target around $30, so I would not chase. If it fell back near $26 I’d have a look at it.

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Medtronic (MDT) - Get Free Report has an unfulfilled measured target around $115, so I’d hold on for that. It might need some time to consolidate over this breakout it had a few weeks ago at around $103, but as long as it stays over that breakout, it ought to work its way there.

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Ryman Hospitality (RHP) - Get Free Report is a down-and-out chart that is trying to break out. As long as it stays over $35, I’d look for it to make its way toward the June high. Should it trade over $45 I’d move that stop up in a hurry.

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I saw the good news for General Electric (GE) - Get Free Report today and clearly the stock liked it. But there is resistance at $7, and it’s hard for me to chase. Should the stock flag in the coming days I would get interested in it. A pullback toward that $6.40 area would be nice. If I was long I would hold.

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Evertec (EVTC) - Get Free Report is an interesting chart because as long as it holds over this $33 area, it ought to enjoy another rally. I just don’t have a great feel for an upside target yet since $36-$38 was the measured target off the breakout over $32.

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