Latest news with #Chaikin
CNBC
10-07-2025
- Business
- CNBC
This chronic underperforming ETF may be turning around, according to the charts
Homebuilder stocks have been chronic underperformers in 2025, failing to develop any sort of bullish rotation while the major benchmarks have recovered quite well. Since the April 7th market low, the iShares U.S. Home Construction ETF (ITB) has experienced minimal gains, resulting in weak relative performance versus the S & P 500. A review of the charts this week shows that the ITB has rotated to an accumulation phase, marked by a pattern of higher highs and higher lows. Let's look closer at this week's breakout and see how this could be just the beginning for this improving industry group. Going into the April low, the ITB was showing all the classic signs of distribution. Price was making lower lows and lower highs, the moving averages were all sloping downwards, the RSI was consistently below 50, and the relative strength was in a confirmed downtrend. In May and June, the price settled into a trading range between $87 and $97, causing the RSI to gravitate towards a neutral 50 reading through that period. So far in July we've noted a dramatic change in the technical configuration, with the price making a clear pattern of higher highs and higher lows. The RSI has pushed above the 60 level which indicates bullish momentum, and the relative strength has turned higher. The price has broken above the 21-day exponential moving average and 50-day simple moving average, both of which have now turned higher. This week, we're now seeing ITB break above the 38.2% Fibonacci retracement level, a signal that often confirms a new bullish phase for stocks. Assuming the price can continue to push higher and eclipse the crucial 200-day moving average, there could be much further upside for homebuilders. What gives us confidence that this breakout phase will continue? The volume picture has become more constructive since early June, when the Chaikin Money Flow (bottom panel) turned positive. This classic volume gauge tracks daily volume readings but weights each reading based on the price action. Quite simply, a stronger up close in price means more important volume on that day. With the Chaikin Money Flow remaining positive, and the Accumulation/Distribution line trending higher, the chart tells us that investors are accumulating shares and we want to participate in that bullish trend. The weekly chart shows that the homebuilders ETF has experienced four major tests of the 150-week moving average since 2018. In each of the three previous instances, a buy signal from the weekly PPO indicator has confirmed a new uptrend phase to lead ITB higher. The April 2025 low came in right at the 150-week moving average, and the weekly PPO generated another bullish signal in early June. Homebuilder stocks have been struggling since Q4 2024, and the returns so far in 2025 have been fairly unimpressive. But given the improving technical configuration, and supportive volume and momentum readings, this could be the beginning of a new phase of outperformance for homebuilders. - David Keller, CMT DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
22-05-2025
- Business
- CNBC
Next stop for rallying Alphabet is the $200 area, according to the charts
With a number of mega cap technology and communication stocks struggling to maintain positive momentum after their recent gains, Alphabet Inc. (GOOGL) appears to be separating itself from the pack. With a decisive move above the 200-day moving average this week, there could be much further upside for this tech giant. The bullish case for GOOGL really started back at the April low, where the stock reached an oversold condition as it retested key support from May 2024. Subsequent lows in April and early May confirmed this support level, and suggested limited downside beyond what had already played out. Over the last two weeks, Alphabet has managed to pound out a short-term pattern of higher highs and higher lows. GOOGL popped above the 50-day moving average earlier this month, setting the stage for this week's move back above the 200-day moving average for the first time since February. For a chart like Alphabet, the key is holding the 200-day moving average. So what would give us confidence that the stock will hold this important long-term trend barometer? Increased volume during the advance would certainly improve the chances of further upside for this tech giant. The On Balance Volume indicator (second panel above) has been trending higher in recent weeks, suggesting that up days have been marked with stronger volume readings. The Chaikin Money Flow indicator has remained mostly above the zero level in May, confirming that the stock is in an accumulation phase. We would want to see additional confirmation with an upward-trending On Balance Volume, as well as the Chaikin Money Flow (last panel above) remaining above zero, to confirm that additional buyers are coming in to push the price ever higher. What sort of upside potential targets would make sense given the patterns we've observed thus far? I would say GOOGL is featuring a classic inverted head-and-shoulders pattern, yielding an upside target near the all-time high from February 2025. Going into the April low, we can see a clear pattern of lower highs and lower lows off the February peak. Then the higher low in May, on less negative momentum readings, suggested a potential inverted head-and-shoulders pattern. The key with this particular pattern is for the price to break above the "neckline" formed by the swing highs between the head and the two shoulders. GOOGL powered above the neckline last week, completing this classic bottoming pattern and unlocking a minimum upside objective based on the height of the pattern. Using the April low and the neckline, we can calculate potential upside to around $197. This would put Alphabet back into the gap range from the initial downside move off the February peak. With our major equity benchmarks stalling out after an aggressive rally off the April low, Alphabet stands out for a tactical breakout above a key resistance level. As long as momentum and volume readings remain supportive, we could see much further upside for this search-and-cloud powerhouse. -David Keller, CMT DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
