Stock Market Technical Indicators & Analysis
When a stock holds up while many other stocks are declining it is telling you something. GOOGL news broke that will likely propel the stock higher tomorrow. GOOGL held its green line through the recent market volatility. Some traders likely knew the news before it came out. A GLB should be held until the stock CLOSES below the green line. On Tuesday GOOGL traded intraday below the green line but closes above it near the day’s high. It has closed above the green line for 6 straight days.
While the new $QQQ short term up-trend has reached Day 5, I am concerned by the daily chart. It looks like a possible head and shoulders top pattern is forming. I labeled the head and shoulders. Note also the recent red volume spikes on down days. The key for me will be whether QQQ can climb above the right shoulder, at 578. If it should instead decline towards the neckline, drawn in pink, and then close below it, I think QQQ could retrace to its recent green line top around 540. Note that neither SPY or DIA are showing similar topping patterns. In fact, $DIA recently had a GLB! (see daily chart)
Note the terrific volume on the day of the breakout. Is it also a cup with handle?
And SPY’s recent rise took it to an ATH!
$GOOGL held up beautifully in Friday’s decline, reaching an ATH and showing relative strength. Note its recent GLB. Must not close back below green line @207.05.
Meanwhile the GMI remains Green and registers 6 (of 6).
While I can think of many reasons why the market will not remain bullish now, I am ignoring them and following my rules. We finished day 4 of the new QQQ short term up-trend and Friday will reach Day 5. I have repeatedly found that if I just held TQQQ from early in a new QQQ short term up-trend I would have outperformed most individual stocks. So I bought a little TQQQ on Day 1 and am slowly adding more. I may buy more again on Friday when it will likely reach Day 5. One has to move quickly with the leveraged ETFs and limit losses, however. See Les Masonson’s excellent recently published book on the topic.
I am also holding some GOOGL. GOOGL had a recent GLB and is holding the green line (207.05). How nice to ride such a leader, for now. See the weekly chart below. Note GOOGL has been riding above its rising 4 wk avg (pink dotted line) for 10 straight weeks. This is the pattern of an advancing stock. See also its daily chart. If GOOGL CLOSES back below the green line, it is a failed GLB and I will exit immediately.
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