Wishing Wealth Blog

This chart shows an interesting short term pattern that makes me think this rally is different from recent ones. I have marked short term tops (T) and bottoms (B). In a declining trend we see lower tops and bottoms. However the most recent bottom is higher than the previous one. We did not get the expected lower bottom. It looks like we now may be getting a higher top. This would be short term bullish if it holds on Friday. Sentiment is so bearish and so many pundits expect more market lows, which makes me think things may be about to turn, at least for the short term.

I received some questions about where to draw the green line for HALO. I drew it at the top of the highest monthly bar even though the stock retreated from the high that month. Some people think it should be drawn at 51.57, the peak reached two months later. I adhere to the rule to draw it at the highest monthly bar, at 56.40. When it crosses that line it is truly at an ATH. I will discuss the rationale for green line break-outs (GLB) at my TraderLion presentation on July 16 at 2:40 PM EST.

I wrote on June 26 about LLY having a possible blockbuster drug for obesity and about its strong technicals. Since then, LLY has resisted market weakness and hit another ATH today. I continue to hold a small position in this stock and am monitoring it closely for signs that the big funds are buying, in anticipation of continuing good results from their clinical trial. Bad results would likely decimate the stock.

A nice daily RWB pattern.

And a strong monthly chart with multiple GLBs.

.

I created a simple scan in TC2000 looking for stocks over $15 that rose today with their highest trading volume in 50 days. Two stocks in my watchlist of 811 stocks mentioned in IBD50 or MS Growth250 lists came up. One of them, CHEF, looks worth monitoring because it is near its ATH and green line top. I placed an alert in TC2000 to text me the moment that CHEF trades at a new  ATH, $42.17. According to  MarketSmith, the last 4 quarterly earnings were  up triple digits and sales growth was up 83%-111%. Composite rating =96 and RS=97, not too shabby. A stock with great fundamentals  that is showing technical strength during a prolonged market decline could prove to be an emerging true market leader (TML) when the market turns.  Below are daily, weekly and monthly charts. My compliments to the CHEF!