Things started bad yesterday, and got progressively worse. Rattled by the wrong comments from Fed Chairman Jerome Powell against a backdrop of more political disruption, the S&P 500 ended Tuesday’s action down 1.56%.
Levi Strauss (NYSE:) was the most noteworthy laggard, losing more than 4% of its value during the session, and then giving up another 2% in after-hours action following another quarter’s worth of slowing sales growth. Biopharma name Nektar Therapeutics (NASDAQ:) suffered a much bigger loss, however, falling more than 13% after a huge downgrade from Goldman Sachs. Goldman is concerned the company will struggle to rebuild trust with investors after a drug-development disaster.
Tops among the few winners was China’s beleaguered electric carmaker Nio (NYSE:). The stock popped more than 10% when the company suggested third quarter deliveries were coming in stronger than previously expected.
As for stock charts worth a closer inspection on Wednesday, however, take a look at General Mills (NYSE:), Eli Lilly (NYSE:) and Hartford Financial Services Group (NYSE:). Here’s why.
Eli Lilly (LLY)
In early July, Eli Lilly shares were putting pressure on a right around $106. The floor ended up holding, prompting a recovery effort. LLY shares are right back in the same trouble they were in then. One more misstep could push Eli Lilly shares over the edge of the cliff. And, the bears have already proven they’re drawing lines in the sand.
- Note than both recovery efforts since July were stopped cold at the 200-day moving average line, plotted in white on both stock charts. Those peaks are highlighted in blue.
Hartford Financial Services Group (HIG)
The last time we took a close look at Hartford Financial Services Group , it was already in a strong uptrend. The 50-day moving average line had just crossed above the 200-day line, underscoring the bullish undertow that developed out of the December lull. That clue ran its course; HIG stock rallied from $50 then to $61 late last month.
With the weight of the gains bearing down for a little too long, the effort finally snapped last week. With one floor now gone and another being tested, Hartford shares are one bad day away from even more serious trouble.
General Mills (GIS)
Finally, much like Hartford Financial, General Mills has logged a pretty impressive gain this year. But, also like HIG shares, GIS stock has also been slowing down the whole time. So far it hasn’t been a problem. But, it could become one soon. One more small selloff and a critical technical floor could be broken, opening the door to a profit-taking driven rout.
- Although the floor remains intact for the time being, the weekly chart makes clear the rally’s been running out of steam for a while. We saw a MACD crossunder take shape in early August.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website , or follow him on Twitter, at @jbrumley.
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