The market edged higher on Tuesday as light volume trading found it easier to guide stocks higher than lower for the day. Despite the move, the S&P 500 and other major indices continue to walk across the top of their ranges as a number of stocks are beginning to make short- to intermediate-term bearish shifts in their trends.
Today’s three big stock charts look at SPDR Gold Trust (ETF) (NYSEARCA:GLD), Wal-Mart Stores Inc (NYSE:WMT) and Ulta Beauty Inc (NASDAQ:ULTA), all three of which are transitioning into short-term bearish plays.
SPDR Gold Trust (ETF) (GLD)
The declining dollar has failed to help rally gold prices of late, as both the SPDR Gold Trust shares and the Dollar ETF have locked into intermediate-term bearish trends, despite higher interest rates and forecasts for continued economic growth.
- GLD shares just broke through the $116-level. This mark had served as support from the charts dating back to March and then resistance before that. A break of this price will likely draw new technical sellers into the market.
- The SPDR Gold Trust ETF is trading below its 50-, 100- and 200-day moving averages, all of which are beginning to transition into bearish trends. This will apply pressure overhead and act as resistance.
- GLD is hitting an oversold reading of its RSI, suggesting that we could see some short-term buying; however, this is more likely to just be a break in what is likely a longer-term decline in prices.
Wal-Mart Stores Inc (WMT)
The day after Amazon Day, Walmart shares are looking ready to make a small short-term bounce, but the bounce is likely to be an opportunity for those looking to sell into strength to exit the stock as the trend is likely to continue lower.
- Monday’s trading took WMT shares below their 100-day moving average for the first time since the stock started its strong rally in February. Failure to recover and move back above this trendline will result in more selling.
- The 50-day overhead is beginning to roll over, indicating that the intermediate-term trends are suggesting the bears are taking over Walmart’s daily price activity.
- From a charting perspective, $72.50 will be a key level for the chart watchers, as this was the bottom last month and also market resistance for WMT shares in early 2017 and late 2016.
Ulta Beauty Inc (ULTA)
ULTA shares fell yesterday on the news that Macy’s Inc (NYSE:M) was slashing prices on their high-end cosmetics.
The sharp decline follows a “sell the news” decline of more than 13% after their latest earnings rally.
- Tuesday’s selling took Ulta Beauty stock through its 200-day moving average for the first time since February 2016. The stock saw further declines during that period, but the stock ultimately entered a six-month long trading period with increased volatility.
- ULTA shares have hit a deeply oversold reading from their RSI, indicating that we should see a “dead cat bounce” at a minimum over the next few weeks.
- Long-term support for Ulta Beauty stock is in place at $243.75. This is the sight of the stock’s 20-month moving average, the line of demarcation between a bull and bear market for the stock.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
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