Tom Aspray examines the charts of four stocks that have sold off heavily despite the market grinding ever higher." />
The old saying “a rising tide lifts all boats” doesn’t always apply to the stock market, and MoneyShow’s Tom Aspray examines the charts of four stocks that have sold off heavily despite the market grinding ever higher.
The major US averages had a choppy session Wednesday as after making new highs early in the session they moved in and out of positive territory. The A/D ratios did close positive with the Nasdaq 100 and Dow Transportation Averages showing the best gains as they were up 0.40% and 0.38% respectively.
The European markets are seeing heavier selling early Thursday with the German Dax Index down 1.3% in early trading. This is consistent with the negative technical readings that I discussed in Tuesday’s column.
The stock index are also down significantly in early trading ahead of the jobless claims. A daily close in the Spyder Trust (SPY) below $151 should signal a decline to the more widely watched chart support in the $149-$149.80 area. This could be the start of the February Surprise and watching how the market acts at stronger support should provide more insight.
As stocks have pushed to the upside, several stocks have seen very heavy selling and they have some common technical characteristics which helped warn in advance of their declines. Let’s look at three of these recent disasters and one stock that may be ready to drop sharply.
Chart Analysis: Cliff Natural Resources (CLF) not only reported very weak earnings but also reduced its dividend by 76%. The stock dropped almost 20% on five times the average volume.
NEXT PAGE: One Stock Shows Ominous Signs