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Stocks may have bounced on Tuesday, led by (of all companies) General Electric (NYSE: GE ) on the message that it is indeed seeking to become better by splitting itself up into more focused parts.
But, as far as game-changing bounces go, Tuesday's 0.2% gain won't be nearly enough "umph" to snap the market back into an uptrend. Too many leading, stalwart stocks like Intel (NASDAQ: INTC ) didn't participate in the rebound effort. Intel continues to suffer the ill effects of firing its CEO after it was revealed he had a relationship with a fellow employee. Most of the downgrades materialized on Wednesday.
Fortunately, the stock charts of Procter & Gamble (NYSE: PG ), BlackRock (NYSE: BLK ) and Tyson Foods (NYSE: TSN ) all look like they're wiggling their way into trends that will take shape no matter which direction the market's undertow is going to end up moving.
Procter & Gamble (PG)
This may have more to do with the fact that investors are seeking out safety and stability than it does with investors falling back in love with the company. But, it doesn't matter.
If Procter & Gamble shares are laying the foundation for a solid move higher, the odds of such a move are what they are.
Click to Enlarge • The context of this near-term bullishness is actually the pullback between January and April, which was ended and reversed when the stock re-met support at a floor that extends all the way back to 2009.
• For a while earlier this month, it looked as if the rebound from May's low was only intended to close April's bearish gap. But, with the revived uptrend since the middle of last week - on consistently higher volume no less - this advance is rather well-founded already.
• The upper side of the rising trading range is at $97, and rising fast. It seems unlikely that a company perpetually surrounded by disappointment could make such a move. As the monthly chart shows, however, this name has managed to keep making forward progress despite so much internal diversity.
BlackRock shares have been fighting a losing battle since January, testing floors and support more often than testing ceilings and resistance. However, it was pushed to the brink of complete collapse on Tuesday with a move all the way to the 200-day moving average line … right where it closed.
Click to Enlarge • The lower side of a converging wedge pattern currently aligns with the 200-day line; one more lower low could push the stock past its last support level.
• Should the stock take that one last bearish step and start the selling cascade, the most plausible downside targets are the Fibonacci retracemenet levels at $463 and $384.
Tyson Foods (TSN)
Last but not least, Tyson Foods is trapped in a rising, expanding trading range that extends back to lows from 2012. We just kissed the lower boundary of that wedge-shaped pattern. Looking forward, we should have plenty of room and reason to look for a fair amount of upside before bumping into the upper ceiling of that pattern.
Click to Enlarge • Within the transition from a downtrend to an uptrend, the daily chart has broken above a falling, straight-line ceiling going back to January's high, guided by a string of higher lows.
• As of this week, TSN shares found support at the 50-day moving average line, using it as a push-off point.
• The 200-day moving average line is really the key. It quelled the budding rally effort earlier this month, but now that the bulls have regrouped at the 50-day moving average line, the next effort could be more fruitful. If-and-when the 200-day line is cleared, there's no technical ceiling again until the mid-$90's.
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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