Monday, June 8, 2015

Exxon Mobile Stock XOM Breaks 28-Year Trendline

On March 24, we posted a rare piece on an individual stock. As we do not invest in individual stocks, they are typically not our focus. Therefore, it takes extraordinary circumstances to inspire a post on a single stock. That was the case with the March 24 post which noted the fact that Exxon Mobil (XOM), the world’s 2nd biggest stock, was testing a trendline that began back in 1987.

The origin of the trendline, based on a logarithmic scale of XOM, is the low point of the October 1987 crash. It then precisely connects the 1994 and 2010 lows. Interestingly, the stock stopped on a dime in March once it hit the vicinity of the post-1987 trendline. I say interestingly because, at the time, the stock appeared to be in no-man’s land. There were no obvious support or resistance levels in the vicinity. And yet, the stock stopped right on the trendline. It then proceeded to “walk up” the trendline for the next 18 days.

To those who dismiss the influence of technical analysis and charting techniques on the behavior of stocks as completely random, I can hardly think of a better example of counter-evidence than this. What are the odds that a stock “respecting”, or adhering to, a nearly 3 decade-old trendline is completely random – for 18 days? Furthermore, after bouncing off this trendline into May, XOM returned to it over the past few weeks. It spent 6 straight days sitting squarely (again) on the trendline…before breaking below it yesterday.

This breakdown marks the first day that Exxon Mobil has ever closed below this trendline. Now, assuming the stock’s behavior around the trendline is not completely random, and considering its capacity as the 2nd biggest stock in the equity market, the effect of this breakdown may be profound. Absent an immediate reversal back above the trendline, this loss of 28-year support would appear to open the door to more downside in the stock.
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Stocks To Watch: VJET, XONE, KITE, TASR

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Voxeljet AG (NYSE:VJET) has broken the upper line of a falling wedge, which was drawn during the last two months. Plus, the stock's MACD has also crossed above the signal line, which further confirms that the trend has switched from negative to positive which indicates that a rally is in progress and we should expect a move higher towards $8.72 where the 100-day EMA (pink line) is found. Note: Anthony Gerstein, Director of Investor Relations and Business Development will present at Stephens Spring Investment Conference in New York, NY on Wednesday, June 3rd, 2015, another catalyst for stock next week.

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ExOne Co (NASDAQ:XONE) is approaching a breakout point at the 13.50 level where it closed on Friday. A break above the 50-day EMA would lead to next targets in the 14.9 and then 16 area. The daily technical indicators are showing positive divergences. The MACD has moved above its signal line and the RSI is rising above the 50% level. Plus, the merged 13-day and 20-day EMAs are beginning to show an upward bias. I Really like the look of this daily technical chart...note earnings Jun 11 AMC.

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The strong move in Kite Pharma Inc (NASDAQ:KITE) shares. The stock price broke out of a Bullish flag chart pattern accompanied by strong volume. I think we will see a nice follow through next week. This momentum could push this stock much higher from here. Next resistance is now seen at $66.40.

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On watchlist no trigger yet. TASER International, Inc. (NASDAQ:TASR) continues to consolidate in a very tight range. Long above $33. The stock has been in a nice uptrend for the last three monts and it looks very strong with the Key EMAs going up. There is plenty of accumulation on daily chart. Use the 50-day EMA as your stop-loss.

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Silver Longs Still Vulnerable

About a week ago, I wrote a short piece detailing the excessively lopsided long position in the silver market noting at that time, that anyone who has long needed to be paying very close attention to their positions. ( see that article here:

In going over this week’s Commitments of Traders report, I see that some of that long position being held by the hedge funds has indeed been whittle down somewhat, but unless a lot more of them bailed out from Wednesday through Friday of this week, that position is still very large and still lopsided.  (more)

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Paycom Software Inc (NYSE: PAYC)

Paycom Software, Inc. offers cloud-based human capital management (HCM) software solutions delivered as Software-as-a-Service in the United States. It provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. Its HCM solution offers a suite of applications in the areas of talent acquisition including applicant tracking, candidate tracker, background checks, on-boarding, E-Verify, and tax credit service applications; time and labor management, such as time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, and labor management reports/push reporting, payroll and tax management, Paycom Pay, expense management, and garnishment management applications.
Take a look at the 1-year chart of Paycom (NYSE: PAYC) below with my added notations:
1-year chart of Paycom (NYSE: PAYC)
PAYC has formed a relatively clear up-channel chart pattern over the last 8 months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, remember that any (3) points can start the channel, but a 4th point or more confirms it. You can see that PAYC has several points of channel resistance (red) and support (green).

The Tale of the Tape: PAYC has formed an up-channel. A long trade could be entered on a pullback down to the channel support, which currently sits near $33. Short opportunities would be on rallies up to channel resistance or on a break of channel support.
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US Weekly Economic Calendar

time (et) report period ACTUAL CONSENSUS
~10 am Labor market conditions index May   -- -1.9
9 am NFIB small business index May   -- 96.9
10 am Job openings April   -- 5.0 mln
10 am Wholesale inventories April   -- 0.1%
2 pm Federal budget May   -- -$130 bln
8:30 am Weekly jobless claims May 30
8:30 am Retail sales May   1.0% 0.0%
8:30 am Retail sales ex-autos May   0.9% 0.1%
8:30 am Import price index May   -- -0.3%
10 am Business inventories April   0.1% 0.1%
8:30 am Producer price index May
0.6% -0.4%
10 am  Consumer sentiment June   90.0 90.7
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