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3 Big Stock Charts for Wednesday: Microsoft, Noble Energy and Johnson Controls

James Brumley

Even with the mid-day rebound, the market still started to the new week in the hole. The S&P 500 index fell 0.69% on Tuesday, remaining below a couple of key resistance levels while finding support at the 20-day moving average line.

3 Big Stock Charts for Wednesday: Microsoft, Noble Energy and Johnson Controls

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Boeing (NYSE:BA) was a key part of the reason the broad market struggled. Though it appears the company’s 737 MAX may be cleared for flight within the next few weeks, several airlines have made schedules through beginning of December that don’t include plans to utilize the currently grounded aircraft. The news sent BA stock lower to the tune of 2.7%.

Though not terribly important for the overall market’s performance, ride-hailing stocks Uber Technologies (NYSE:UBER) and Lyft (NASDAQ:LYFT) fell 6% and 7%, respectively, on growing concern that California is going to force both companies to reclassify their contracted drivers as employees. The move could upset the organizations’ business models in a big way.

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To be sure, not every name lost ground. Shares of retailer Conn’s (NASDAQ:CONN) jumped more than 18% after revealing better-than-expected second quarter numbers. Although same-store sales were only up 0.4%, total revenue improved 3.3%, leading to healthy profit margins.

As for names worth a closer look moving into Wednesday’s action, though, it’s the stock charts of Johnson Controls (NYSE:JCI), Microsoft (NASDAQ:MSFT) and Noble Energy (NYSE:NBL) that are of the most interest. Here’s why.

Johnson Controls (JCI)

With nothing more than a quick glance at its chart, Johnson Controls shares appear to still be moving higher in a respectable — even if imperfect — uptrend. And, perhaps it is.

A closer look at both the weekly as well as the daily stock charts, however, also drops hints that the rally could be slowing down, and is maybe even close to rolling over. JCI stock re-broke a recent support level on Tuesday, and is close to putting pressure on another one again after a couple of other red flags have started to wave.

  • Click to Enlarge
    The re-broken support line is the one that connect April’s and then May’s and June’s lows on the daily chart, marked in yellow. It’s not able to do so any more.
  • In the meantime, the purple 50-day moving average line is increasingly under pressure. Johnson Controls shares bounced back from their encounter last week, but it’s one bad day away from being breached again.
  • Zooming out to the weekly chart we can get a better sense of how the rally since the last part of last year is slowing. In fact, the MACD lines have already turned bearish as of this week.

Microsoft (MSFT)

A reliable winner for long-term investors, Microsoft is a bargain on any healthy dip. But, a dip appears to be in the works. Underscoring that prospect is the shape of the chart’s long-term rally, and a new shape it’s taken on just since the beginning of August. The backdrop is acting as a red flag as well. The bears just need to dish out one more good blow before any selloff becomes self-sustaining.

  • Click to Enlarge
    The line in the sand, so to speak, is the support line that tags all the key lows going back to December. It’s marked in yellow on the daily chart, and has been tested several times since the beginning of August.
  • From the long-term view offered by the weekly chart, the July peak makes a great deal of sense. It aligns with all the major highs since late-2017, plotted in purple.
  • It’s difficult to ferret out with just a cursory look at the daily data, but the daily chart’s accumulation-distribution line is now logging lower lows, while the weekly chart’s Chaikin line is close to breaking below zero. Both suggest the volume tide has already turned bearish.

Noble Energy (NBL)

All energy stocks are tricky — and dangerous — prospects right now. Crude oil prices were hit rather hard on Tuesday, as traders continue to figure out the balance between the United States’ newly opened oil spigots, the impact of political turbulence in the Middle East, and whether or not a recession is looming.

Nevertheless, Noble Energy shares are slowly but surely piecing together what appears to be a rebound effort after a rough 2018, and a volatile 2019. With or without the broader market’s help, NBL stock is one or two good days away from a breakout that’s been taking shape for nearly three months.

  • Click to Enlarge
    Critical to the consolidation of late is the support line made up by all the key — and rising — lows since June’s bottom. It’s plotted as a yellow dashed line on the daily chart.
  • The big hurdle in question is two-fold, though each fold is aligned. The 100-day and 200-day moving average lines, marked in gray and green (respectively) on both stock charts. Noble continues to chip away at each.
  • In the meantime, though it would be easy to miss, a horizontal technical ceiling just above $23.00 may be in play, too. That’s more or less where NBL stock has peaked several times since late June.

As of this writing, James Brumley held no position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley.

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