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June 15, 2005
Notable Charts 050615
Stocks opened strong with a gap across the board, but strength fizzled in the first 10 minutes and the major indices dropped sharply the next hour and 20 minutes. With such a weak start on the day and a failed gap, I will post a few bearish charts today.
Good day and good trading.
The Bears
***Bearish*** Barr Labs (BRL) gapped down in early May on high volume and then formed a rising wedge with the advance back to 52. A big bad bearish engulfing formed last week and the stock gapped down on Tuesday. The downside target is 45-46 and a move above 52.1 would negate this signal.
***Bearish*** Joy Global (JOYG) met resistance just below 40 with a big bearish engulfing. This bearish candlestick reversal was confirmed with a break below the lower trendline of a rising wedge. A small flag formed over the last few days and a move below 34 would open the door to a support test at 30.
***Bearish*** Checkfree (CKFR) broke trendline support in mid April and bounced with a feeble advance back to 38 in mid May. The move formed a bearish rising wedge and the stock severely underperformed the Nasdaq in May. CKFR broke trendline support in late May and below its prior low with a sharp decline last week. A move to the low 30s is expected and a move back above 38 would negate this bearish forecast.
***Bearish*** Automatic Data Processing (ADP) was first featured on 1-Jun and the stock broke triangle support with good volume early last week. The break opens the door to a support test around 40.
***Bearish*** Priceline (PCLN) looks sick. The stock gapped lower in early May and the top of the gap acted as resistance. The stock failed to partake in the May advance and is on the verge of breaking the lower trendline of a rising wedge. The bear signal has already been given and a move below 22 opens the door to 18. Watch resistance at 25.5 to turn this chart positive.
Posted by Arthur B. Hill at June 15, 2005 11:17 AM