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01/10/2019 |

TrendSpider Thursday Analysis: Nearing Crucial Channel Resistance

Thursdays are a great day to get an idea of the overall market direction for the week but also an idea of what the rest of the week may hold into the weekend. As the $SPY and other broad market ETFs seem to have found a bottom, we take a look at FANG stocks to see how these beaten-down companies look into mid-January. There were some huge status-quo technical changes to take note of as well as some red flags. See what we mean in this Thursday’s Analysis!

$FB: Daily Candle

$FB chart.

  1. Facebook is one of the stocks looking more bullish than bearish after a diamond bottom breakout through the downward channel that has not had the price break through it since JULY of 2018. Watch out for a bull trap here if the price cannot hold previous resistance now acting as support. The reasoning for this is the fact that there hasn’t been a ton of volume on this upside move.
  2.  After the Vortex Indicator confirmed the move up in the middle of the channel, the price has broken out since. However, the VI+ is getting close to the threshold at which price has reversed in the past.
  3.  The recent MACD cross likely became self-fulfilling as technical traders looked at this area to go long.
  4. The Williams % Range is higher than the previous price peak (last time the channel resistance was tested). But seems to be losing a little momentum into Thursday.

$AAPL: Daily Candle

$AAPL chart.

  1. Apple is another one with a bullish technical setup into Thursday with a recent falling wedge breakout. As with Facebook, there hasn’t been a ton of volume to the upside here.
  2.  The recent VI cross suggests a reversal confirmation to the upside especially as this cross has not happened in several months.
  3.  The bullish kiss off the MACD proved more upside ahead and this correlated well with the falling wedge price breakout.
  4. Unlike Facebook, the Williams % Range is still very oversold and has room to move up.

$AMZN: Daily Candle

$AMZN chart.

  1.  As we move into the middle of the pack for FAANG stocks, this is where things start getting a little iffy. The price of AMZN barely closed above the channel resistance with two indecision dojis in a row.
  2.  The recent VI cross confirmed the move up to channel resistance with the VI+ and VI- now nearing reversal thresholds.
  3.  The MACD histogram shows a possible topping out of momentum as the fast (MACD line) attempts to break through the zero line.
  4. The Williams % R is showing signs of momentum possibly fading as well as the % R ticked down while the price closed green.

$NFLX: Daily Candle

$NFLX chart.

  1.  Netflix is currently a very odd setup compared to the rest of the FAANG stocks. There are two distinct channels here with the price breaking through the first, secondary channel earlier in the week but the primary channel still has yet to be tested above. This is different than the other FAANG price charts as all of them are trading right at primary channel resistance.
  2.  The Vortex Indicator is showing signs of an extreme move down to what has been a reversal point in the past. However, after correcting, the price did continue to move up the last time the VI- was this far down.
  3.  The MACD is breaking out hard but the histogram continues to show a possible “topping out” pattern here at least short term.
  4. The Williams %R is very overbought from the massive move up after testing channel support in late December. Profit takers will likely step in at some point this week which would add supply to the equation, possibly moving price back down to test the secondary channel resistance now acting as support below.

$GOOG: Daily Candle

$GOOG chart.

  1.  Google is trading right at the top of the channel which has rejected price three other times since this downward trend has started. Notice how violent the selloffs have been after this price interaction with resistance. This is definitely something to keep an eye on.
  2.  The Vortex Indicator is set up very similar to the last three times a reversal has occurred at the channel resistance.
  3.  The MACD is currently crossing the zero line with the histogram starting to plateau.
  4.  The %R seems to be finding some trouble breaking to overbought levels which may suggest, as the MACD is as well, momentum may be fading.