The year-end rally looks to be underway, and I expect this bounce to unfold technically as a three-wave pattern into early January. The key resistance for this move initially lies near 3942-50, but this could very well be exceeded up to 3975 or even 4000-5 before stalling out as 2023 gets underway. Only if 4100 is exceeded would one start to question whether pullbacks into Spring could lead back to new lows, and for now, bounces are thought to falter into January per the 80-day trading day cycle before weakening into mid-to-late January. As shown below, prices stabilized and have rebounded from the 50% retracement area, which also lines up coincidentally with some Ichimoku cloud support. It’s expected that Treasury yields might roll over again as equities extend higher and given the bearish trend from mid-December as well as the ongoing downtrend from January 2022, it’s right to look to sell strength initially over the next two weeks. The market will be forced to prove itself if a larger rally is possible, which at present, appears unlikely, and might give way to further selling into late January.
Bristol Myers Squibb- Still attractive; Expecting rebound
BMY entry a few weeks ago looks to have been premature, as the push back to new all-time highs failed on this recent go-around, and the stock has fallen to the low $70s in just the last couple weeks.
However, technically speaking, this remains an outstanding stock structurally, and it’s right to stick with longs and simply lower support to $70, expecting prices to rebound into January.
As weekly charts show, this pullback continues to hold intermediate-term trendline support after a breakout of a nearly 20-year Cup-and-Handle pattern.
While this weekly chart below fails to cover the long-term structure, it does show why recent pullbacks likely do not represent a structurally damaging decline. Weakness should likely stabilize here and start to turn higher.
Upon the next push back to new highs, this likely should jump-start a more meaningful rally in BMY. At present, Healthcare as a sector remains attractive, and Pharmaceutical names look appealing to buy dips.
Albemarle (ALB) looks to stabilize near former lows; Hold
(This stock is not technically on the UPTICKS list for FSI subscribers, but important to highlight given its pattern, as I’ve discussed with institutions.)
ALB has pulled back sharply in recent weeks but looks to stabilize right near recent lows, and rallies look likely into early January.
If/when downtrend line resistance cannot be broken on a bounce in the next 1-2 weeks, and this turns back down, the correct support should materialize at $215. (New Support) Under that level likely leads to additional weakness and buying dips would not be recommended.
At present, it’s right to expect this support holds, and ALB should attempt a bounce attempt into January.
Extra Space Storage (EXR) Bad breakdown; Proper to use bounce to exit
Another important stock to highlight concerns the REIT $EXR, which has proven to be a disappointment technically in recent weeks, selling off on heavy volume which has caused a drop down to multi-month lows.
This also likely should hold and attempt to bounce from near-term oversold conditions, however, and one can expect a mild rally in the week
Bounces look likely to $153 up to $155. However, a move back above $160 looks unlikely. For those involved, it looks right to consider 155 strong near-term resistance on gains. Failure to get back above $160 on rallies should be reason to avoid EXR, expecting a possible pullback to test $138.
This latter level looks to be important support on any further drawdown and EXR is unattractive and likely underperforms further on any drop under $138.