Chart Patterns to Watch This Week 5-1-2019 with David Moadel
hello friends and welcome to looking at the markets with David Modell I'm gonna
go over the charts that I'm looking at right now and these are mostly going to
be daily candlestick charts from Finn viscom first one we're looking at right
now is HP hewlett-packard and I see an ascending triangle forming with a
resistance line at the top that's what makes it an ascending triangle along
with a rising a support line but if you look at the ascending triangle you'll
see that the candlesticks in the past few days have broken down below that
ascending triangle that is bearish price action not looking good it's got to get
back up there if we're going to be bullish at all otherwise I'm just going
to stay out of it I'm going to look at Procter and Gamble
we see a very skinny and getting skinnier that is a rising wedge if it
breaks down below the rising wedge that is definitely bullish it's the price is
rather high and it's in the middle of the rising wedge and it's getting
skinnier and skinnier when it gets really thin like that I might expect a
breakout to happen soon because that volatility is coiling up the volatility
is low and it's getting ready to make that move it's hard to predict when and
in which direction so I'm just going to watch it for now
a similar situation is budweiser if you thought that Procter & Gamble had a
skinny rising wedge check out Budweiser here bu d is the ticker symbol and yeah
it's just getting really thin it's not as high on the chart as Procter & Gamble
appeared to be but still it's right in the middle that that rising wedge there
if it breaks down below it that's definitely bearish but I am expecting
perhaps a big move because the the volatility is so low is just coiling up
it's like a like a slingshot you just don't know necessarily which
direction it's gonna go in up or down I'm staying away from that looking at
City big banker there and I am seeing a nice looking rising channel there I like
the look of that especially that bounce off of the lows now it is at the top
part of the channel unfortunately so but you can still play the channel if it
continues to form it if it hits that bottom and that channel bounces off
nicely like it did over here back in late March that'd be great if it gets
down to 65 and then bounces up that is super bullish in my opinion of course
none of these chart patterns are perfect so you know don't buy something just
because I'm bullish on it you want to make your own decisions of course at all
times sprint if man talked about playing a
range here I mean you could have you could have played it quite nicely here
and you know back in late December and then over here in late March early April
and it's hit that point again it went a little bit below it though but yeah
that's a bit concerning I suppose but if it if it bounced if it starts to bounce
off of that level nicely that could definitely be a bullish sign I believe
so just because it stayed so nicely within that range there that's sprint
Pfizer which is a healthcare giant of course and we're looking at a downward
channel which has been in progress for multiple months here it's in the middle
of it a little bit higher than the middle and if it hits that 42 and a half
40 to 50 level I don't know if I would take a long position necessarily because
it would be at the top of the channel I'd be very cautious about that
UnitedHealthcare speaking of a health care Giants we're gonna notice that we
have a it's hard to tell whether it's a channel or a descending wedge because
they're almost parallel but not quite so I would call that a I'm sorry falling
wedge I should say that would be falling wedge it's in the middle of it mmm I do
know that if you have a falling wedge and it breaks above it that that's
bullish that tends to be bullish so hey I'll tell you what if it breaks above
250 you know well by the time it breaks probably be around 250 if it breaks
above that decisively closes above that wedge I believe that would be bullish
want to look at some just macro charts your macro environment
and these are from Zero Hedge by the way and you've got the implied market
implied 2019 Fed rate change this is 2018 over here and then this is January
2019 notice that in all of last year people especially towards the end of the
year all the market participants the investors the traders we're all
expecting fed the the Federal Reserve to raise bond yields Treasury interest
rates and then look where it's going now this year they're just expecting rate
suppression so and they're probably right judging by the most recent FOMC
dot plot which predicted no more rate hikes for the rest of this year and
probably only one rate hike in the next three calendar years so the rate
suppression scheme continues unabated meanwhile stocks continue to just move
upwards probably as a result of largely as a result of the rate the interest
rate bond yield suppression you know that people have to invest in something
and unless they're going to go into real estate they're probably going to go into
stocks so notice that the VIX futures and options speculative positioning are
at a record short here in 2019 so what does that tell you well again that's
like a spring or slingshot coiling up I believe that could be troubled because
these short positions do have to unwind at some point so you know all it takes
is one Black Swan one catalyst one negative event to set this position off
in motion in the other direction and notice that the RSI on the S&P 500 is in
over bought territory if you know you use the standard settings of 30 and 74
oversold and overbought it's definitely overbought and it has
not been overbought this much in quite a while so you know I'm again
and it's also at a a bit of a resistance point but I'm more interested in the RSI
here so please use caution caution is always advised all right if you found
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I'll talk to you again soon
you