Shares of Tesla are down Monday morning after breaking down from what
normally is a bullish continuation pattern. This tight consolidation
throughout the first half of September is what most technicians would
consider a bullish pennant that traditionally resolves itself in the
direction of the underlying trend. But in this case, the pattern broke
down rather than up.
Here is a daily candlestick chart of $TSLA
where you can see this break. The bulls are still in control here from
an intermediate perspective as long this resistance from February and
August turns into support. Our polarity principles teach us that former
resistance should become support:
So far this appears to be the case as shares of TSLA stopped dropping
once they hit this 264-265 level. But a break below that could be
disastrous for this popular momentum name.
I would also use this uptrend line from the May lows as a key level
for risk management. Bulls are fine as long as that 264 holds, otherwise
a test of this uptrend line is in the cards. If neither one of those
can serve as support, then a test of the 200 day moving average is
likely, which is near the 210 level.
Something else worth mentioning is that a breakdown below this former
resistance near 264 would confirm that this breakout earlier this month
was a failed move, and would suggest a fast move to the downside is
coming. So although we do have that uptrend line in the 250s, the former
resistance shaded in gray is really my key level. Please share this article
Folks who do fundamental analysis figure folks who do technical
analysis might as well use tea leaves to make investing decisions. Folks
who do technical analysis point out the fundamental analysts can be
right about a company's value... and still lose huge amounts of money.
Then there's sentiment analysis: Die-hards in both camps call it too "touchy feely."
Me? I don't take sides.
I like to say we're "mercenaries" in my trading service, DailyWealth Trader.
We go wherever the market will pay us. And when I'm looking for a good
trade, I use all three types of analysis. They all have something to
Actavis plc, an integrated specialty pharmaceutical company, is
engaged in the development, manufacture, marketing, sale, and
distribution of pharmaceutical products in the Americas, Europe, the
Middle East, Africa, Australia, and the Asia Pacific. It operates in
three segments: Actavis Pharma, Actavis Specialty Brands, and Anda
Distribution. The company also develops and out-licenses generic
pharmaceutical products primarily in Europe through its third-party
business; and provides products in women’s health, urology,
gastroenterology, and dermatology therapeutic categories.
Take a look at the 1-year chart of Actavis (NYSE: ACT) below with added notations:
ACT started the year off with a bang by running from about $170/share
up to $230. However, since that time the stock has traded mostly
sideways, while creating a relatively clear level of resistance at that
same $230 (blue) mark. That resistance level was also obviously a
52-week high resistance. Earlier this week, ACT broke to a new high, and
the $230 level should now provide support on any pullbacks. A break
below $230 could signal a false breakout.
The Tale of the Tape: ACT broke out to a new 52-week
high. A long trade could be made near $230 with a stop placed below
that level. A break back below $230 would negate the forecast for a
continued move higher. Please share this article
Oil prices have
fallen 15% over the past year, and they could slide further before
stabilizing. That's good news for U.S. consumers who are paying an
average of $3.41 for a gallon of regular gasoline -- the lowest price in
six months, according to AAA.
"There's some downside still on
prices, but I think we're near the bottom here," says Andrew Lebow, a
senior VP for energy derivatives at Jefferies Bache. "Maybe another
dollar or two on WTI and maybe another dollar or two on Brent.... We’re
near the lows."