As we close to the top of what has been a reasonably strong Q3 for the fairness markets, we’re left with the everlasting query for buyers: “What’s subsequent?”
We now have the Fed’s first price lower within the rearview mirror, with a number of price cuts anticipated into early 2025. We even have a extremely contested election season, a quickly escalating scenario within the Center East, and earnings season, which is barely a pair weeks away.
The fantastic thing about technical evaluation is that worth motion ought to compensate for investor expectations for all the above. If buyers are excited, nervous, euphoric, despondent, or wherever in between, the interaction between patrons and sellers can inform us an incredible deal about investor sentiment. With that in thoughts, listed below are a number of the particular person inventory charts I will be watching as we transition into the fourth quarter.
Comcast Corp. (CMCSA)
As I reviewed tons of of charts to finally settle in on simply ten to assessment, I used to be struck by the truth that 5 out of the ten are in the identical sector: Communication Providers. From Magnificent 7 names to outdated telecoms, there are many bettering charts on this sector.
Whereas many shares could possibly be thought of overextended after this week, Comcast is unquestionably not one of many them. This chart contains a basic rotation from a distribution section (decrease highs and decrease lows) by means of a consolidation section (even highs and lows) and into a brand new accumulation section (increased highs and better lows).
This week, CMCSA lastly pushed again above its 200-day shifting common, in addition to the earlier peak from mid-July. If this inventory can comply with by means of above the $42 stage, we might simply see a retest of the January 2024 peak round $46 and past.
Meta Platforms, Inc. (META)
One of many key questions for October is whether or not the market will stay robust regardless of the conventional seasonal weak spot round this time of 12 months. META could also be the perfect chart to look at to find out whether or not our benchmarks will stay in a bullish section.
Meta has examined resistance within the $520 to $540 vary since first arriving at these ranges in March, and, a pair weeks in the past, that stage was lastly eclipsed. Any time a inventory breaks above a well-established resistance stage, I wish to see it maintain that breakout level on any subsequent pullbacks.
META ended the week in an overbought situation, with the RSI remaining above 70. This typically suggests a pullback is imminent, significantly when the RSI dips again beneath this overbought stage. Will Meta Platforms maintain $520 in addition to the 50-day shifting common on a pullback? In that case, then this bull market might see uncommon energy in arguably the weakest of the 12 months from a seasonal perspective.
VFCorp (VFC)
Subsequent is VFCorp, my first choice outdoors of the Communication Providers sector. This producer of attire and footwear manufacturers, together with Timberland and The North Face, has entered a brand new uptrend section off a serious low again in March.
Whereas VFC has already gained about 80% off the March low, the bullish section seems very a lot nonetheless in place right here. We will see a constant sample of upper highs and better lows, and the worth is now trending increased above two upward-sloping shifting averages. The RSI indicator tells us the momentum is powerful however not extreme. I have a tendency to consider charts like this as “harmless till confirmed responsible,” and, as a trend-follower, meaning I comply with the development till the chart tells me to do in any other case!
On the lookout for the opposite seven charts to look at? Take a look at the total video on my YouTube channel!
RR#6,
Dave
P.S. Able to improve your funding course of? Take a look at my free behavioral investing course!
David Keller, CMT
President and Chief Strategist
Sierra Alpha Analysis LLC
Disclaimer: This weblog is for instructional functions solely and shouldn’t be construed as monetary recommendation. The concepts and methods ought to by no means be used with out first assessing your individual private and monetary scenario, or with out consulting a monetary skilled.
The creator doesn’t have a place in talked about securities on the time of publication. Any opinions expressed herein are solely these of the creator and don’t in any approach characterize the views or opinions of every other individual or entity.
David Keller, CMT is President and Chief Strategist at Sierra Alpha Analysis LLC, the place he helps energetic buyers make higher choices utilizing behavioral finance and technical evaluation. Dave is a CNBC Contributor, and he recaps market exercise and interviews main specialists on his “Market Misbehavior” YouTube channel. A former President of the CMT Affiliation, Dave can be a member of the Technical Securities Analysts Affiliation San Francisco and the Worldwide Federation of Technical Analysts. He was previously a Managing Director of Analysis at Constancy Investments, the place he managed the famend Constancy Chart Room, and Chief Market Strategist at StockCharts, persevering with the work of legendary technical analyst John Murphy.
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