The stock market had a nasty reversal on Wednesday, and the top hit new all-time highs, just as we expected. Downside follow-through is important. We had the futures down sharply earlier, and now they’re flagging. So we do want to be prepared, so we’re going to cover the short side here.
Grupo Aeroportuario del Sureste, SAB de CV (ASR) has had a big run-up for the last year. It has gone from under 70 all the way up to 141, more than doubling. The trend line was broken, it made a big thrust to the downside, and has been in a falling wedge ever since then. It has taken out support and was down another 77 cents on Wednesday. More importantly, though, is the overall structure. It looks like it's broken key support and may come to the next level, which looks to be 100, and if it gets through that, it may even get down into the mid-to-high 80’s.
MicroStrategy Inc. (MSTR) has a declining topsline that goes all the way back a year now. It has gone from 157 all the way down to the 85 area, but the recent action is a breakdown, a bear wedge that formed that created a breakaway gap to the downside, and then another bear flag. It calls for a move that could take it down somewhere in the 81-2 zone, perhaps even in the high 70’s.
Regal Beloit Corporation (RBC) has a head-and-shoulders top, a big breakaway gap to the downside, a rising wedge, it rolled over in the last couple days, and then on Wednesday, it was down 1.87, or 3%. It may get down quickly to test the lower support around 58, which is the short-term target.
Triumph Group, Inc. (TGI) has a head-and-shoulders, it rolled over, formed a bear wedge, and then rolled over again on Wednesday, down another 1.29. If it can get through support around the 71 area, it could quickly see 67, maybe even the low 60’s.
Other stocks on Harry’s Charts of the Day are Carnival Corporation (CCL), CARBO Ceramics Inc. (CRR), DXP Enterprises, Inc. (DXPE), Northern Tier Energy LP (NTI), PerkinElmer Inc. (PKI), Stage Stores Inc. (SSI), SolarWinds, Inc. (SWI), Transmontaigne Partners L.P. (TLP), Tempur-Pedic International Inc. (TPX), and Domtar Corporation (UFS).