As TPA discussed in yesterday’s World Snapshot, a small percentage of U.S. stocks have managed a 50% retracement from the huge decline in 2020. A 50% retracement marks a critical level for stocks and indexes after a big technical breakdown. Only 10.46% of S&P1500 stocks have made such a move back. The stocks below have managed approximately a 50% retracement and look vulnerable at current levels.
See the above stocks in the Retracement tables below.
All of the stocks above have similar technical characteristics:
1. Violated long term uptrends
2. Violated medium term uptrends
3. 50% retracement of the decline off of 2020 high to the 3/23 low
4. At or close to the uptrend breakpoint
See all charts below…..
· TYL – fell below its 50DMA for the first time in 8 months in March. The 50DMA is now descending for the first time in over 1 ½ years. The zoom chart reveals that the recent 20% rally puts TYL right at resistance from its breakdown below 2020 support just above 300. The weekly chart clearly shows the long term uptrend violation.
· VRSK – has rallied 26% in just the past 7 days and is now back to its March breakpoint. The weekly chart clearly shows the violation of VRSK’s long term uptrend. VRSK is vulnerable here.
· NDSN – has rallied 43% from its 3/23 low. The zoom chart shows that NDSN is now back to resistance after it broke down below 6-month support at 140. The weekly clearly shows that NDSN fell below its consistent 4-year uptrend line in March and is now back to that breakpoint, which should be resistance.
· CDNS – is now up 30% in the past 7 days and is back the level of its gap down day in early March (zoom chart). The weekly chart shows that, after violating its long term uptrend, support is all the way down at the 45 level. CDNS is vulnerable here.
· TDY – has now rallied 50% in 7 days. TDY fell below its 200DMA in early March on a huge gap down day. The zoom chart shows that TDY has established a series of lower highs and lower lows = downtrend. TDY is now at its new downtrend resistance. The weekly clearly shows that TDY violated 2 long term uptrend lines during March’s decline. TDY is vulnerable at these levels.
· RPM is now up 42% from its 3/18 low. The zoom chart shows that RPM has established a pattern of lower highs and lower lows=downtrend. RPM is now at resistance from its new downtrend line.
· HD – fell below 9-month support at 200 in March. HD has now rallied 40% from is 3/18 low and is just below the breakpoint of 200, which should now be resistance (zoom chart). The weekly clearly shows that the long term uptrend is no longer in place.
· MCO – fell below the 50DMA, 100DMA, 150DMA, and 200DMA in March. MCO is up 29% from the 3/23 low and is back to the level that was marked by the gap down days in March that pushed MCO below the 200DMA. MCOP is now just under its 200DMA, which should be resistance (zoom chart). The weekly clearly shows that MCO’s long term uptrend is no longer intact.