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The Top Stock Charts You Need to See This Week

AInvestThursday, Aug 1, 2024 12:18 pm ET
2min read

As we navigate the current market landscape, our outlook remains favorable toward sector rotation, driven by macroeconomic forces such as monetary easing and disinflation. Economic data remains in a goldilocks zone, though any decline in data could change the current bounce attempt. Evaluating internals and breadth is crucial to determine the best setups, alongside tracking sector and industry performance. Here are the top charts of the week, offering clear technical patterns and notable performance metrics:

1. IWM (iShares Russell 2000 ETF)

IWM is correcting within a longer-term bullish trend. Despite its MACD being below the signal line, it remains 10.2% above an upwards-sloping 200-day moving average, indicating relative strength against the S&P 500.

  • Momentum: Waning, as the 14-period Slow Stochastic Oscillator shows investors are less aggressive in recent purchases, potentially taking profits.

  • Volume: Significant, with the last 10 days seeing higher-than-average volume, including today's 34,190,102 shares traded. The On Balance Volume (OBV) indicator is bullish, suggesting more active buyers than sellers.

  • Volatility: Higher than usual, as indicated by the wide Bollinger Bands, hinting at a potential pause or reversal in the near-term trend.

  • 2. ARM (Arm Holdings PLC)

    ARM is also correcting within a longer-term bullish trend but is underperforming compared to the S&P 500. The stock is 14.7% above its upwards-sloping 200-day moving average, but momentum is strongly bearish.

  • Momentum: Strongly bearish, with the 14-period Slow Stochastic Oscillator below 20, signaling oversold conditions as investors actively sell shares.

  • Volume: Heavier than usual, with 19,563,624 shares traded so far today. The OBV indicator reflects near-term selling pressure, despite longer-term accumulation.

  • Volatility: Higher than normal, with wide Bollinger Bands suggesting possible near-term trend reversal or pause.

  • 3. CVNA (Carvana Co.)

    Carvana's surprising profit and bullish forecast boosts stock to multi-year peak. CVNA is in a strong bullish trend, outperforming the S&P 500 with an upwards-sloping 200-day moving average and a positive MACD histogram.

  • Momentum: Strongly bullish, indicated by a rising 14-period Slow Stochastic Oscillator as investors pay higher prices for shares.

  • Volume: Heavier than usual, with 8,915,951 shares traded so far today. The OBV indicator is bullish, showing more active buyers than sellers.

  • Volatility: Normal, with Bollinger Bands indicating volatility in line with the norm for this stock.

  • Conclusion

    These charts reflect a range of market conditions, from strong bullish trends to corrections within longer-term uptrends. Monitoring volume, volatility, and momentum indicators such as MACD, OBV, and Slow Stochastic Oscillator provides insights into potential future movements. As always, evaluate the internals and breadth of the market to identify setups with the highest probability of success.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.