Dow Roadmap Part 3

21.       Microsoft, MSFT, $62.14  Microsoft was one of the steadiest performers of the Dow in 2016 with price action consistently showing a higher relative strength than the S&P.  Despite the steady advance all year, the SCTR still remains high at 78 and looks very strong. The PNF chart shows a long pole rising and our oscillators all show positive with no divergences. We see no reason why MSFT cannot continue to make new highs in 2017.

2017-01-04-27

22.       Nike, NKE, $50.83  This was a stock that managed to be a loser on the year just past. In late September, it appeared that NKE was going to form a fifth wave advance but this eventually failed and the stock fell into the doldrums for the rest of the year. At the moment, the price looks in danger of dropping down to the mid to low ‘40’s as there are hints of a head and shoulders top.  SCTR is very poor at 15, indicating little buying support. We expect prices to be lower in 2 to 4 months.

2017-01-04-28

23.       Pfizer, PFE, $32.48  Trading in a range all year, PFE wound up only slightly higher than where it started in January. The overall chart pattern is non-descript, the SCTR statistic is at 26 and the relative strength is below that of the S&P.  Very little of interest technically here.  We would just stand aside unless we saw any technical hints of a committed direction.

2017-01-04-29

24.       Proctor and Gamble, PG, $84.08  This stock is in a similar position to PFE.  Very little to point out pattern-wise, SCTR is at a low 35 and relative strength is poor vs the S&P. We would avoid this stock and expect that it will trade lower over the next 2 to 4 months.

2017-01-04-30

25.       The Travelers Cos., TRV, $122.42  This stock has been trading in a fairly tight up trending range for a number of years, finishing 2016 near the top of that range. SCTR line at 63 is steady if not persistent buying.  PNF charts show a recent double top breakout but trading history seems to indicate that price will revert back to the 200 day moving averages around the $114 area.  Overall, we expect this stock to only track the S&P.

2017-01-04-33

26.       United Technologies, UTX, $109.62  This component moved up steadily all year to finish at the top of the range.  UTX has a higher RS than the S&P and a steady SCTR number of 58. There was a recent PNF buy which would target $120 as a first target. We can see in fact that $120 is a fairly significant level of historical price resistance, so we think that the risk reward here is not compelling on the long side.

2017-01-04-37

27.       United Healthcare, UNH, $160.04  One of the strongest Dow stocks all year; it still shows a healthy accumulation reading of 72, the oscillator that we favor shows continued momentum without divergence.  The only warning is that the price targets have been reached on the PNF chart. This may meant that price may come back to the moving averages shown on the chart below, but we expect UNH to continue advancing over the next 2 to 4 months.

2017-01-04-33

28.       Verizon, VZ, $53.38  Verizon’s price movement in 2016 was quite volatile shaking out longs and shorts alike. It has a middling reading of 47 on the SCTR reading and relative strength is just slightly above the S&P. While not compelling at the moment, the longer term monthly chart shows good long term accumulation.  Accordingly we would look to enter long on a setback in prices to the mid ‘40’s.

2017-01-04-34

29.       Visa, V, $78.02  Visa’s chart appears to be in the process of turning over to the downside.  SCTR numbers are low at 39  and relative strength is below the S&P’s.  Most compelling is the conspicuous divergence between price and our wave oscillator which has been declining even as prices have crept up.  Accordingly, we expect prices on V to be lower in the next 2 to 4 months and would look for selling opportunities.

2017-01-04-35

30.   Walmart, WMT, $69.12  Walmart has lagged the S&P in 2016 and the SCTR statistic is a poor 23. At best, WMT should be a sideways stock, but more likely will be lower in the next 2 to 4 months. We see little reason to be involved in WMT.

2017-01-04-36

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