With the most important averages logging a sturdy up week throughout the board, and with the Nasdaq 100 lastly retesting its 200-day transferring common from beneath, it may well really feel like a difficult time to take a shot at successful charts. Chances are you’ll ask your self, “Do I actually wish to be betting on additional upside after an extremely sturdy April?”
When the macro atmosphere feels much less sure, I discover it is useful to return to tried-and-true technical evaluation approaches. By figuring out shares with constructive chart patterns, we are able to hopefully focus our consideration on names that might do nicely whatever the general market actions within the coming weeks.
With that bottom-up investing justification in thoughts, let’s assessment three latest earnings names which might be exhibiting sturdy technical profiles going into subsequent week.
Visa Inc. (V)
Each Visa (V) and Mastercard (MA) reported earnings, and each shares skilled an upside follow-through after their quarterly report. Visa has been pounding out a constant sample of decrease lows and decrease highs for the reason that finish of February, however this week seems to have damaged that downtrend sample.
After Tuesday’s earnings launch, Visa accomplished a transfer out of the downtrend section by breaking trendline resistance utilizing the most important peaks from February and March. Wednesday’s up day pushed V again above the 50-day transferring common, a stage which had repelled a earlier breakout try in mid-April. MA has now damaged above its late March excessive, and an analogous transfer subsequent week would counsel a retest of all-time highs for Visa.
Coca Cola Co. (KO)
The Shopper Staples sector pulled again this week, and main names within the sector, similar to Coca-Cola (KO), skilled a quick drop post-earnings. KO is demonstrating a cup-and-handle sample, though we have not seen the breakout that might serve to substantiate a bullish outlook.
We have used the Annotations software to attract a rectangle marking the resistance zone from the September 2024 peak. Subsequent peaks in March and April 2025 have retested this identical vary, forming the cup-and-handle sample which frequently precedes a powerful upthrust. The set off for this sample is a confirmed break above the rim of the cup, and, with this week’s pullback, buyers should await this bullish affirmation.
We have famous the bearish momentum divergence in latest months, with the upper value highs in March and April marked by weaker RSI peaks. With this bearish divergence clearly signalling a weaker momentum profile, we would wish to see a sound break above $74 on stronger RSI readings to negate the divergence and ensure an upside breakout.
CME Group Inc. (CME)
Since I mentioned the exchanges with Jay Woods on my Market Misbehavior podcast again in February, I have been following the resilient uptrend of upper highs and better lows. The every day chart encompasses a collection of consolidation patterns adopted by upside breakouts which have led to additional good points.
That is the type of chart that I take into consideration when somebody asks, “However when you’re shopping for the brand new highs listing, is not that too late?” The chart of CME reveals that new highs typically result in much more new highs. And when a inventory like CME Group retains pulling again to an ascending 50-day transferring common, I am reminded the essence of trend-following is to stay invested in charts that proceed to work.
Within the immortal phrases of legendary technical analyst Paul Montgomery, “Essentially the most bullish factor the market can do is go up!”
I had the pleasure of heading again into the StockCharts TV studio this week to shoot the “High Ten Shares for Might 2025” video with Grayson Roze. Visa was one of many 5 shares I contributed. Try the opposite 9 on this week’s video!
RR#6,
Dave
P.S. Able to improve your funding course of? Try my free behavioral investing course!
David Keller, CMT
President and Chief Strategist
Sierra Alpha Analysis LLC
Disclaimer: This weblog is for academic functions solely and shouldn’t be construed as monetary recommendation. The concepts and methods ought to by no means be used with out first assessing your individual private and monetary scenario, or with out consulting a monetary skilled.
The writer doesn’t have a place in talked about securities on the time of publication. Any opinions expressed herein are solely these of the writer and don’t in any means signify the views or opinions of another particular person or entity.
David Keller, CMT is President and Chief Strategist at Sierra Alpha Analysis LLC, the place he helps lively buyers make higher selections utilizing behavioral finance and technical evaluation. Dave is a CNBC Contributor, and he recaps market exercise and interviews main consultants on his “Market Misbehavior” YouTube channel. A former President of the CMT Affiliation, Dave can also be a member of the Technical Securities Analysts Affiliation San Francisco and the Worldwide Federation of Technical Analysts. He was previously a Managing Director of Analysis at Constancy Investments, the place he managed the famend Constancy Chart Room, and Chief Market Strategist at StockCharts, persevering with the work of legendary technical analyst John Murphy.
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