We had a strong day in the markets today with the small caps(IWM) breaking out to new 52 week highs. SPY and QQQ are lagging behind, but still showing good strength as well. The markets feel a bit stretched here and a few days of consolidation are likely in order. There are a lot of extended charts right now, and traders need to exert discipline and not chase profits. Below are some charts I'll be watching throughout the rest of the week.
APL has been on a tear over the last year, and is now consolidating its most recent gains in a “high and tight” bull flag on extremely low volume. Watch for a move higher in concert with a rise in volume.
ASIA has been coming to terms with its 200 day moving average throughout the last couple of months. It was recently supported by both its now rising 50 day moving average and a rising trendline and is currently testing a descending trendline that has held it in check recently.
AXL recently failed a breakout of both a descending trendline and its 20 day moving average. It fell below several key averages as a result of this failure, but is holding up relatively well. If it can reclaim the $13 area and the respective resistance clumped up in that area, it will likely run higher and ultimately retest its recent highs.
BOOM has had a nice run this year and has held up well throughout the recent bout of weakness in the markets. It looks poised to continue higher and is one to watch if the markets continue to breakout.
FORM recently broke out of a wide descending channel, and is now in the process of retesting its breakout area. Notice the decreasing volume indicative of healthy profit taking. Keep an eye on intraday action and volume to give us a clue that FORM has come to terms with its breakout and is ready to resume its breakout.
ICO has been in a very steady uptrend for several months now and is currently coming to terms with a price tag of $11. It has had very steady support at its rising 50 day moving average and is a good candidate to watch if we pull back over the next few days. An immediate break higher and out of its recent bull flag is also very possible, so keep this one on close watch.
SBGI recently had a strong breakout above $8, and is currently consolidating 50% later. While SBGI is still in the process of consolidating this move and may need more time to come to terms with this price level, it is one to keep an eye on and wait for a tradeable pattern to emerge.
Quite the opposite of most of the other charts on this watchlist, SLXP had an ugly gap down last month, and has been consolidating in a bear flag throughout march. However, it was able to break above its recent price action and may be ready to try and fill its gap. Many failed bearish patterns have led to great gains recently and SLXP has the potential to follow in their footsteps.
SRZ has been a monster since last summer, and was able to break to new highs today. Watch this one for continued strength.
STE was able to overcome a descending trendline last week, but was held in check just under the $35 price level. If it can overcome this area, a likely retest of its recent highs is probably in order.
Financials have been lagging the current markets, but may soon enter “catchup mode”. WFC has one of the cleaner and easier to identify techinical patterns in this sector. Range has steadily contracted over the last month and is now reaching its apex.
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