Shares surged within the second half of August with a number of ETFs breaking out of corrective patterns, akin to falling flags or falling wedges. Despite the fact that September is a seasonally weak month, these breakouts are bullish till confirmed in any other case. At this time’s commentary will analyze the breakout within the Know-how SPDR (XLK).
The chart under exhibits XLK in a long-term uptrend. The Development Composite turned optimistic in early February and is at present at +5. This implies all 5 inputs are on bullish indicators (Bollinger Bands, CCI, StochClose, Keltner, SMA Route). The Development Composite is a part of the TIP indicator edge plugin for StockCharts ACP. Click on right here to be taught extra.
XLK hit a 52-week excessive in July after which corrected into mid August with a falling wedge. As mentioned at TrendInvestorPro, this sample is typical for pullbacks inside larger uptrends. XLK broke out of this wedge on August twenty third after which surged 2% on August twenty ninth with a protracted white Marubozu candlestick. These candlesticks mirror a robust advance from open to shut as a result of they don’t have any tails.
This candlestick holds the important thing to the August breakout and instant uptrend. A robust advance and breakout ought to maintain. A detailed under 169 would negate the August twenty ninth surge and the August breakout. The blue dashed traces present the choice sample at work (a rising flag). A break under 169 would affirm the rising flag and sign a continuation of the prior decline (mid July to mid August).
Take a look at the Chart Dealer report at TrendInvestorPro for extra on these breakouts. Tuesday’s report lined the breakouts in SPY and QQQ, seasonal patterns for the following three months and a number of other buying and selling setups. Symbols embody XLV, IBB, JETS, IHI, AMD, AZN, CSX, ORLY and PAYX. Final week we lined the breakouts in gold, a number of tech-related ETFs and shares. Click on right here for instant entry.
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic method of figuring out pattern, discovering indicators inside the pattern, and setting key worth ranges has made him an esteemed market technician. Arthur has written articles for quite a few monetary publications together with Barrons and Shares & Commodities Journal. Along with his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Enterprise Faculty at Metropolis College in London.