Wednesday’s 0.2% setback for the S&P 500 still wasn’t enough to push it past the point of no return. But, anything remains possible at this point … good or bad. More than anything, traders are losing interest.
Teva Pharmaceutical (NYSE:) was a proverbial problem child, off more than 4% after a judge rejected its initial settlement offer to end an opioid liability case against the company. Chesapeake Energy (NYSE:) was the bigger overall drag, falling more than 7%, mostly driven by industry pricing weakness. General Electric (NYSE:) helped keep the weakness to a minimum, up 1.5% as investors increasingly buy into the turnaround story.
None are great picks headed into Thursday’s trading though. Rather, it’s the stock charts of Philip Morris International (NYSE:), Twitter (NYSE:) and H & R Block (NYSE:) that merit the closer looks.
H & R Block (HRB)
Shares of H & R Block are, in simplest terms, at a crossroads.
The fact that HRB was able to recover and rebound after being on the verge of a pretty significant selloff (as recently as March) confirmed there’s a rather significant floor around $23.65, plotted in blue on both stock charts. However, this week’s action also confirms there’s a major ceiling that stands in the way of higher highs. Although the stock could still fall on either side of the fence, with two years’ worth of consolidation ready to be unleashed, the possible breakout thrust is worth a closer look.
- Although none of the other attempts to hurdle $29.20 have been effective, this one differs in that the last couple days have made big gains on big volume.
Philip Morris (PM)
With nothing more than a passing glance at Philip Morris, it looks as if it has averted trouble. And, perhaps it has. The weakness seen late last month has been quelled, with a technical support level taking shape around $76.70.
This may only be a short pause before the selloff resumes again, however. One more misstep could push PM shares over that cliff’s edge.
- The floor at $76.70 is more meaningful than the past few days would suggest. That same level was a key floor a trio of times in 2018, making it a more important support area now.
Several times earlier this year Twitter was featured as a budding bullish candidate. Although choppy, the fact that the buyers were repeatedly making an attempt to reclaim ground lost in the middle of last year was encouraging. The breakout move finally took shape in April, though in the worst possible way. That is, a huge gap was left behind; traders generally don’t like to leave gaps unfilled.
Sure enough, that gap was filled in the meantime, with last month’s weakness. The spot with which the bounceback has taken shape, however, suggests a whole new trading range has been established that will serve as a Launchpad for the move to the next higher level.
- This week so far, the purple 50-day moving average line and the blue 20-day moving average line have acted as a technical floor, holding TWTR above a key technical ceiling near $37.20, plotted in red.
- It’s more readily evident on the weekly chart, but with the recent move higher, the old trading range between $35.80 and $26.25 has been left in the rearview mirror.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, , or follow him on Twitter, at @jbrumley.
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