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It could have been worse, and for a while yesterday, it was. The S&P 500 Index ended the day down 1.6% Thursday, but it had been in the hole as much as 2.6%. The partial rebound may be the beginning of a major pivot. Or, it might just have been a temporary stroke of luck.
Whatever it was, Twitter (NYSE: TWTR ) dished out more than its fair share of the total damage. After Citron Research's Andrew Left called the company "toxic" in response to human rights abuse allegations - saying "Twitter has become the Harvey Weinstein of Social Media," - TWTR shares fell 11% to a close of $29.29. That's still well above Left's suggested target of $20.00.
Tilray (NASDAQ: TLRY ), conversely, jumped 10.3% in response to news that the marijuana supplier would be teaming up with beer brewer Anheuser-Busch InBev to develop cannabis-infused drinks .
Both names are too volatile to step into as trades today, however. Rather, it's the relatively more mundane stock charts of Delta Air Lines (NYSE: DAL ), Microsoft (NASDAQ: MSFT ) and Altria Group (NYSE: MO ) that merit closer looks as this trading week winds down.
It's got more to do with the broader market than with Microsoft, specifically. Still, MSFT shares are quietly slipping into more trouble than most investors realize. It's uncomfortably vulnerable here, and Microsoft's stock price may have suffered a back-breaking blow Thursday.
Click to Enlarge The back-breaker is yesterday's move below the white 200-day moving average line. Yesterday's close was the first below that line in years, but it did so after the onset of a clear downtrend since the late-September high.
- What's gone largely overlooked about the past several weeks is just how much bearish volume has crawled out of the woodwork. More traders may be ready to lock in gains than realized. Note the Chaikin line crossed below the zero level weeks ago.
- Although Microsoft shares might bounce with the market from here, if MSFT falls under yesterday's low, that might be a death blow.
Delta Air Lines (DAL)
A week ago , we pointed out that Delta Air Lines shares were in a downtrend that was ultimately prompted by a bump into the upper edge of a long-term trading range. Although not there at the time, DAL stock was en route to the lower edge of that trading range.
Thanks to yesterday's sizeable pullback, Delta stock has kissed that technical floor again. The bounce hasn't taken shape yet; but if it's going to happen, this is the most likely place for it to happen.
Click to Enlarge The trading range is plotted with white dashed lines on both stock charts. The floor has held up the prior four times it was touched.
- While the momentum is clearly bearish, the volume behind the current pullback isn't convincing. The majority isn't rushing out of their positions here.
- Should that support level fail to hold up as a floor, however, there's no other plausible support level in sight.
Altria Group (MO)
Finally, with just a quick glance it looks like Altria Group just went from bad to worse. MO stock closed 1.23% on Thursday, adding to what's become a 24% pullback from its early November peak.
A closer look at both stocks charts of Altria, however, actually may be hitting a low right now, and gearing up for a strong bounce.
Click to Enlarge The shape of yesterday's bar is a clue in and of itself. The close and open both near the upper end of the bar with a long tail in between implies we saw the last of the sellers flushed out and the first of the buyers start to file in.
- The volume surge also suggests that a huge swath of shares are changing hands, marking the transition from a net-selling to a net-buying environment.
- Largely overlooked about the recent pullback is that we've been here before, right before a rebound. Yesterday's low touches a support line that tagged all the key lows going back to the middle of last year.
- The confirmation of the signal will be a firm bullish follow-through on Thursday's pivot.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter , at @jbrumley.
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