Key Weekly Stocks Charts Are Gaining Momentum Except For This Sector

The weekly charts for the six equity indices I track are mixed with the S&P 500 Index setting yet another all-time intraday high at 4,249.74 on Thursday, June 10.

The Dow Jones Industrial Average has a positive but overbought weekly chart. The Nasdaq Composite has a positive weekly chart.

The Dow Jones Transportation Average is the year-to-date leader but could have a negative weekly chart next week. The Russell 2000 Index has a positive weekly chart after staying above its annual pivot at 2,120 on May 12. It’s now close to setting a new all-time high.

The Philadelphia SE Semiconductor Index has a positive weekly chart after moving back above its quarterly pivot at 2,974 during the week of May 21.

Transports were the leader and is now the laggard since the week of May 14. The Russell 2000 and the SOX now have positive weekly charts.

Let’s study the weekly charts:

The Dow Jones Industrial Average (.DJI) (34,479) has a positive but overbought weekly chart. It’s above its five-week modified moving average at 34,185 with its 12x3x3 weekly slow stochastic reading declining at 86.37. If the Dow stays below its monthly pivot at 34,872, the downside risk is to its annual, semiannual and quarterly value levels at 33,426, 32,644 and 39,766, respectively.

The S&P 500 Index (.SPX) (4,247.44) has a positive but overbought weekly chart. It’s above its five-week modified moving average at 4,174.82 with its 12x3x3 weekly slow stochastic reading above 90.00 at 93.04. The S&P is above its monthly pivot at 4,239.4. Its annual, quarterly and semiannual value levels at 3,932.3, 3,883.4 and 3,785.0, respectively.

The Nasdaq Composite (.IXIC) (14,069.42) has a positive weekly chart. The Nasdaq is above its five-week modified moving average at 13,756.16 with its 12x3x3 weekly slow stochastic reading rising at 71.83. The Nasdaq is between its quarterly and monthly pivots at 13,890 and 14,274. Its semiannual and annual value levels are 12,395 and 12,001.

The Dow Jones Transportation Average (.DJT) (15,327) has a positive but overbought weekly chart but it’s close to being downgraded to negative. It’s just above its five-week modified moving average at 15,322 with its 12x3x3 weekly slow stochastic reading declining at 81.64. Transports are above its annual pivot at 14,425 with a monthly risky level at 16,167.

The Russell 2000 Index (.RUT) (2,335.80) has a positive weekly chart. This small-cap index is above its five-week modified moving average at 2,270.43 with its 12x3x3 weekly slow stochastic reading rising at 65.78. At the beginning of the year the stochastic reading was above 90.00 as an inflating parabolic bubble. Its annual pivot is 2,120.34 with a monthly risky level at 2,571,89.

The Philadelphia SE Semiconductor Index (.SOX) (3,210.06) has a positive weekly chart. The semiconductor index is above its five-week modified moving average at 3,148.14 with its 12x3x3 weekly slow stochastic reading rising at 68.66. At the beginning of the year the stochastic reading was above 90.00 as an inflating parabolic bubble. Its quarterly value level is 2,980.78 with its monthly risky level at 3,572.68.

Since the year 2000, there have been three bear market declines. Each was led by the Russell 2000. Dow Transports was the last to set new multiyear or bull market peaks. This year, the Russell 2000 peaked on March 15 and Transports peaked on May 10.

Stochastics scale between 00.00 and 100.00 with readings above 80.00 overbought and readings below 20.00 oversold. I say that a reading above 90.00 is an “inflating parabolic bubble,” and a reading below 20.00 is ‘too cheap to ignore’.

Book profits when readings are above 90.00. Buy when readings are below 20.00.